Ukraine

Business

Journal

5:40 AM Sunday, November 18, 2018
UBJ.am
UBJ.am - Friday, February 16
Horizon leads successful IPO: Colt Canada wants to sell rifles; Trains to Russia most profitable; PrivatBank ups SME lending 2/3; Visa-free to Seoul?
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
  • OPIC has signed a deal to insure $250 million in fixed-rate bond securities issued in US capital markets for a major Ukraine project. Because of this insurance, Moody’s rates the bonds Aa2, well above the government of Ukraine's Caa2 rating. The money raised will go to building a Central Spent Fuel Storage Facility at the Chernobyl site. This storage facility will ultimately save Ukraine “hundreds of millions of dollars” now spent on storage in Russia, says Energoatom, Ukraine’s nuclear power plant operator. Following Overseas Private Investment Corporation guidelines, the project will generate $225 million of procurement of US-made goods and services. Holtec International of New Jersey, will supply storage casks, other equipment and training to the project over five years.
  • Horizon Capital, the Kyiv-based private equity firm, has guided one of its investments, Purcari Wineries PLC of Moldova, through an IPO on the Bucharest Stock Exchange. Investors oversubscribed the offering more than four times over. Horizon reports: “As a result of this successful public launch, Horizon Capital, on behalf of its fund EEGF II, has sold a 40.9% stake in Purcari, realizing a 3.2 times gross cash-on-cash return on the sale of these shares.” Horizon retains 22.7% stake in the winery, which has operations in Moldova and Romania.
  • French company Suez Environnement is to prepare financial models for projects to turn Ukrainian garbage into energy, Sergei Savchuk, chairman of the State Energy Efficiency agency, said after meeting a company delegation in Kyiv. Suez has built large waste processing plants in Belgrade, Serbia and in Poznan, Poland. In Ukraine, biogas stations can sell electricity at an advantageous "green" tariff, currently 12.4 euro cents / kWh.
  • French company Global EcoPower SA is to build a 20MW solar power station in Khoroshiv, Zhytomyr region, according to Philippe Perret, a company director, and Igor Gundich, head of regional administration. Since December, Zhytomyr has announced three solar power investments, totaling 65MW and $60 million.
  • Russia was behind the cyber attack on Ukraine’s banks, government and power grid last summer, Britain’s Foreign Office says. Cyber experts at the National Cyber Security Centre say the GRU Russian military intelligence agency was responsible for the NotPetya attack in June 2017. The Foreign Office said the attack masqueraded as criminal ransomware, but in fact was a deliberate attack on Ukraine.
  • Colt Canada, the main supplier of small arms to Canadian Forces, is chasing a deal that could see Ukraine order up to 100,000 rifles, The Ottawa Citizen reports. In December, Canada’s government changed Canada’s arms export rules to allow the sale of automatic weapons and other small arms to Ukraine. In January, representatives of Colt traveled from their Kitchener, Ontario headquarters to Kyiv to discuss a sale. Ukraine is upgrading its weapons to NATO standard. In September, Defense Minister Stepan Poltorak talked with Canadian Defense Minister Harjit Sajjan about Canada building an ammunition plant in Ukraine.
  • As consumer spending picks up, the warehouse market tightens around Kyiv, responsible for about one third of spending in Ukraine. A survey by Pickard Real Estate & Asset Services reports: “ The warehouse market around Kyiv has only less than 2% vacancy level currently, and even this space is under serious negotiations….With brownfield land sites still at historic lows and sites available and construction costs still low, now should be the time to invest in warehousing. Rents levels are sure to increase as will yields.”
  • PrivatBank plans to increase lending to small businesses this year by two thirds over last year, to $178 million, the bank says in a press release. With more and more Ukrainians opening small businesses, the bank, Ukraine’s largest, says that it added 76,000 new small business clients last year.
  • The number of registered unemployed people dropped by 50,000 in January, to 378,900, according to the State Statistics Service. Officially, the unemployment rate is 1.4% and there are 1 million job vacancies. With signs in the Kyiv metro offering Ecolines bus tickets to Poland for $15, many unemployed people now travel to the EU for temporary jobs.
  • Azerbaijan’s SOCAR Energy Ukraine plans to launch five new facilities in Ukraine this year, the company tell Azernews. After doubling LPG sales last year, the company wants to install LPG dispensers at its 59 gas stations. The state company, a major provider of oil to Ukraine, wants to get in on Ukraine’s aviation boom by selling aviation fuel. A SOCAR official said: “We see great prospects for development in Ukraine.”
  • When roadwork season starts next month, the Infrastructure Ministry intends to start repairing 4,000 km of roads this year, according to Infrastructure Minister Volodymyr Omelyan. Including international aid, this year’s road repair budget is a record $2 billion.
  • Trains to Russia were the most profitable lines for Ukraine’s state railroad last year. Kyiv-Moscow, with 11 cars and 77% occupancy, earned Ukrzaliznytsya the most - $5.7 million. Odesa-Moscow, with 10 cars and 89% occupancy, came in second, earning $3.6 million profit. In fifth place was Kyiv-St. Petersburg, with 11 cars, 65% occupancy and $740,000 profit. Also profitable were: Khmelnytsky-Moscow, Lviv-Moscow, Kovel-Moscow, and Kharkiv-Moscow. Ukraine and Russia cut off air service in October 2015. Since then, nationalist politicians have called for ending train service. But Ukraine’s railroad lost $130 million last year on passengers a loss that was compensated by freight.
  • Ryanair board member Juliusz Komorek confirmed Thursday that the discount airline will fly to Ukraine this fall. "This is a real date. I hope this would happen," he told Poland's Fly4free publication. Komorek, a Pole, said the flights would not be the same as announced last year, adding: "There will be some changes in this timetable. But the flights from Ukraine to Poland will be definitely launched." Separately, Minister of Infrastructure Vladimir Omelyan at a press conference in Kiev that there would not be a reduction in the number of Ryanair flights to Ukraine.
  • Ukraine is drawing nearer to visa-free regime with South Korea, Interior Minister Arsen Avakov posts on his Facebook page from Seoul. He wrote: "Do we need the visa-free regime with the 11th world economy? The question is rhetorical! I am very glad that we have managed to come close to an agreement on this issue." A visa-free regime might prompt Ukraine International Airlines to start service from Kyiv Boryspil to Seoul Incheon.

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UBJ a.m. is reported by UBJ Editor in Chief. He is reachable at laurenson.jack@theubj.com
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