Ukraine

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15:22 PM Thursday, September 21, 2017
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UBJ AM Sept. 11, 2017
James Brooke
Ukraine Eurobond road show starts today in London, US on Wed. and Thursday; Ukraine to privatize three large companies by year’s end; Three US companies plan investments in Ukraine
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

• The Finance Ministry starts a road show today to promote Urkaine's new Eurobonds with maturities from 10 to 15 years. Meetings will be in London today and Tuesday, in New York on Wednesday, and in Boston on Thursday, Sept. 14.

• The proceeds will be partially used to redeem in circulation Eurobonds maturing in 2019 and 2020. This is the first time Ukraine has gone to the markets in five years, and the first time ever with Eurobonds as long as 15 years.

• Ukraine, which is expected by to soon extend its debt maturities, has appointed Rothschild as an advisor to the Finance Ministry, Reuters reports. Kyiv has appointed Citi, Goldman Sachs and JPMorgan to lead the new eurobond issue. Thomson Reuters data shows $2.4 billion worth of dollar-denominated debt issued by the state and state-owned subsidiaries will mature next year, with another $5.4 billion and $4.6 billion coming due in 2019 and 2020 respectively.

• Ukraine’s parliament has voted to remove a tax for foreign investors on profit earned on debt swap operations, after Prime Minister Volodymyr Groysman said this was needed to allow Ukraine to borrow this month, Reuters reports. Groysman said before the vote: “I ask you to pass this in its entirety so that in September we can refinance in order to save budget funds on state debt servicing.”

• The State Property Fund plans to privatize three large state-owned enterprises before the end of this year, Yuriy Nikitin, deputy head of the Fund, told Focus. Up for auction will be: the Agrarian Fund, the State Food and Grain Corporation, and the United Mining and Chemical Company. Nikitin said there already are 10 interested investors, a mix of foreign and national. He estimated that the three privatizations would bring in at least UAH 5 billion, or $20 million.

• US company Holtec International intends to produce small modular reactors in Ukraine, according to Yuriy Nedashkovsky, president of Energoatom. After attending the opening of a Holtec plant in New Jersey, Nedashkovsky told Ukrinform that Holtec International CEO Kris Singh offered to President Poroshenko “to create a hub in Ukraine, distributing small modular reactors to Europe, Asia and Africa, with the localization of production and a large number of equipment at Ukrainian enterprises.” Ukraine’s Turboatom already is working with Holtec to make SMR-160 small modular reactors.

• A consortium of Westinghouse Electric Sweden, Polenergia International, and EDF Trading Limited want to participate in the Ukraine-EU Energy Bridge, according to Ukraine's Energy and Coal Industry Ministry. High voltage transmission lines would connect reactor No. 2 of the Khmelnitskiy Nuclear Power Plant to the EU power grid, about 250 km to the west. Sales of power to Europe would pay for building two more reactors at Khmelnitskiy.

• The Greenbrier Companies of USA, wants to work with Ukrzaliznytsia, to build about 10,000 freight cars in Ukraine, the Infrastructure Ministry reports after a meeting with a company representative last week in Kyiv. The company builds rail cars in Portland, Oregon, in Świdnica, western Poland, and in three cities in Mexico. Earlier it was reported that Ukrzaliznytsia wants to create a leasing company with Greenbrier and Amsted Rail, of Chicago.

• Ukrzaliznytsya plans to build up its Black Sea to EU rail route to carry 2.5 million tons of cargo yearly, the company head, Evgeny Kravtsov, says. This would involve modernizing about 100 km on the 900 km route between Chernomorsk and Izov, a rail crossing with Poland. The route would be promoted as a rail corridor to Central Europe.

• Taking hundreds of trucks off southern Ukraine’s roads, a container train now runs between Dnipro city’s River Port and the TIS Black Sea terminal near Yuzhni. The train takes 19 hours to travel the 630 km. A project of TIS, Ukrrichflot, Maersк Line and Ukrzaliznytsia, the route was launched as a test last May and started as a regular service last week.

• The railroads of Ukraine, Georgia and Azerbaijan have signed a memorandum of understanding to create permanent rail-ferry service along this east-west route: EU-Ukraine-Black Sea-Georgia-Azerbaijan-Caspian Sea-Central Asia-China. The memorandum provides for creating a joint venture to operate Ukrzaliznytsia ferries between Ukraine and Georgia.

• Three port projects will be Ukraine’s first infrastructure concessions in the public private format, according to Stepan Kubiv, Economic Development and Trade Minister of Ukraine. These first three projects will be concessions of Olvia, a state-owned stevedoring company, Kherson Maritime Merchandise Port, and Chornomorsk rail and ferry complex. Deputy Infrastructure Minister Nadia Kaznacheyeva said concession tenders could be held next year. Ukraine needs $35 billion to modernize its infrastructure, the ministry calculates.

• With Ukraine’s unique geographic location, the nation can increase 20 times the volume of goods moving through its territory, Prime Minister Volodymyr Groisman told an Odesa conference, Integrated Transport Corridors Europe-Asia. Acting on this vision, he said the government is investing heavily in developing roads, railways and airports, Ukrinform reports. In Odesa, Groysman launched the new "AutoHUB" at the seaport, inspected repair of a section of the Kyiv-Odesa highway, and visited work on extension and resurfacing of the airport’s 2.8 km runway.

• AutoHUB, a new service for convenient registration of vehicles purchased abroad, opened Friday at Odesa seaport. With imports mounting of cars from the United States and the Emirates, AutoHUB concentrates in one building the work of seven state and private institutions, including customs officers, border guards, Interior Ministry, an insurance company, and a bank. One year after excise duties, imports of used cars have jumped, largely through Ukraine’s land border crossings.

• Under a new program to upgrade a total of 144 km of Ukrainian roads leading up to border crossings with Poland, two Polish construction companies will do EUR 58 million worth of rebuilding and repairs of roads in Lviv and Volyn regions. Ukraine’s state highway agency, Ukravtodor, has signed contracts with the two Polish winners of the tenders, Drog-Bud Sp.z.o.o. and Unibep S.A. A Polish loan on soft terms is to pay for the work. Slawomir Nowak, head of Ukravtodor, said: "This is the first unprecedented agreement between the governments of Poland and Ukraine on improving the state of infrastructure and roads.”

• Ukroboronprom expects to work with Poland's armed forces to modernize T-72 tanks to NATO standards, according to the press service of Ukraine’s state arms agency. Changes included upgrading the tank’s main gun with a NATO 120mm caliber gun and refurbishing the tank's defensive armor. Polish and Ukrainian defense companies unveiled their new PT-17 main battle tank prototype during last week’s MSPO-2017 defense exhibition. The new tank is an upgraded version of the T-72 MBT with NATO-standard ammunition. Ukraine and Poland cooperate on joint production of high-precision weapons, anti-air weapons systems, drones and the joint modernization of aviation and armored vehicles.

• Switching most tax services to online has been approved as a top priority of the State Fiscal Service, the Finance Ministry said on its website. According to the ministry, about 60% of contacts of taxpayers go through the payers servicing centers. The tax service said 35 out of 55 services can be fully provided online, and the rest partially. The agency said: “It is necessary to reduce the human factor as soon as possible, automate the processes and move to the model where taxpayers can get most of the services online.”

• Lviv region is talking with Sweden’s IKEA about setting up production facilities for IKEA, the world's largest furniture retailer, according to Roman Matis, investment adviser to the regional government.


For comments and story ideas, please email UBJ Editor in Chief James Brooke at james.brooke@theubj.com

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