Business news from Ukraine

EX-TOP MANAGERS OF UKRAINIAN PRIVATBANK CREATING RETAIL MOBILE BANK IN UK

The former top managers of PrivatBank (Kyiv) are creating a bank in the UK, a counterpart of the mobile bank Monobank, Dmytro Dubilet, the ex-director for information technologies at PrivatBank, said on his Facebook page.
“I publish the first episode about how Oleh Horokhovsky, Mykhailo Rohalsky and me are launching a bank in the UK … We’ve decided to open a bank in the UK – a counterpart of Monobank. And we decided to do something like a reality show from it. We have to find contractors and partners, get licenses, and, most importantly, we have to raise capital. And we will make videos about all this and post on this channel (YouTube),” he wrote.
Ex-first deputy head of PrivatBank Oleh Horokhovsky said on Facebook “the English project is not just a business project. It’s a real test that sums up everything that was done before and sets an incredible bar.”
As reported, Horokhovsky, Dubilet and ex-head of the Payments and Transfers business at PrivatBank Mykhailo Rohalsky in January 2017 announced their intention to create an IT company, Fintech Band. According to Dubilet, the company will deal with processing, CRM systems, credit cards, Internet banking, etc.
By October 2017 Monobank issued the first thousand credit cards, and in February of this year it starts to attract deposits.
Dubilet’s father, Oleksandr Dubilet, before the nationalization of PrivatBank in late 2016 headed the board of this financial institution.

PARLIAMENT PASSES BILL REGULATING CONCESSION IN CONSTRUCTION OF ROADS IN UKRAINE

The Verkhovna Rada of Ukraine has settled the issue of construction of new roads in Ukraine on the concession conditions.
A total of 233 lawmakers backed bill No. 6766 at second reading on Tuesday.
According to the explanatory note to the document, concession roads are roads of higher quality, which meet high standards, since the main thing for the users of these roads will be the quality and speed of traffic. These roads are built to cut and straighten the route bypassing populated areas and connect the two towns directly, reducing the route by 50-100 km, resulting in a reduction in fuel costs and time savings.
Meanwhile, the law of Ukraine on concessions for the construction and operation of roads indicates that the decision on the construction and/or operation of roads on concession terms is taken by the Cabinet of Ministers of Ukraine on the basis of a feasibility study, but it is not determined what exactly should be mentioned in this decision. In addition, the law does not provide for the concessionaire to compensate for failure to reach the actual traffic intensity and when income is not received.
“It is also worth noting that the mechanism for allocating land for the construction, operation and maintenance of highways has not been clearly regulated,” the explanatory note stated.
Thus, the bill in particular provides: roads of general use of state importance can be transferred for the construction and operation on concession terms; after making a decision on the construction and operation of highways that can be provided for concession, the executive authorities are prohibited from taking any actions with land parcels foreseen for the construction and operation of these highways for use and/or ownership of citizens or legal entities.
According to the document, the decision on holding a concession tender is taken by the Ukrainian government, which, inter alia, specifies the technical parameters of the highway, the basic financial indicators for granting the road to the concession, the deadline for which the concession is granted, the maximum amount of compensation to the concessionaire and the alternative route which can be taken free of charge.
The Cabinet of Ministers also determines the largest amount of a flat toll for using motor roads built on the terms of concession, which is paid taking into account the level of inflation and the conditions under which the concession award is made to the concessionaire.
Concession payments are sent to the national budget of Ukraine.

OVOSTAR SEES 26% RISE IN REVENUE IN 2017

Ovostar Union, a leading shell egg and egg goods producer in Ukraine, increased revenue by 26.9% in 2017, to $99 million, according to an unaudited preliminary report.
According to a company report on the Warsaw Stock Exchange (WSE), earnings before interest, taxes, depreciation and amortization (EBITDA) last year grew by 8.3%, to $26 million.
The group plans to boost egg production by 5% in 2018, to 1.75 billion eggs, dry egg products output – by 9%, to 3,550 tonnes and liquid egg products – by 12%, to 13,000 tonnes.
Ovostar Union expects that the number of laying hens this year would grow by 9%, to 7.2 million.
Currently, the group continues its investment program at the site of the Stavyschanska poultry farm, which was started in April 2014 and will be completed in 2019-2020. Upon completion of the investment project, the bird population will reach 10 million heads, egg production – 2 billion eggs a year. Now the program is completed by 60%.
In 2018, the group plans to build two bird houses, two premises for young hens and a feeding installation. According to the company’s estimates, capital investments will amount to about $15 million.

REAL WAGES IN UKRAINE 12.3% UP

Real wages in Ukraine in January 2018 increased by 12.3% compared to January 2017, while compared to December 2017 it fell by 13.4%, the State Statistics Service has said. According to its data, the average nominal salary of full time workers in January compared with December 2017 decreased by 12.1%, in annual terms it grew by 28.4%, amounting to UAH 7,711, whereas in December it stood at UAH 8,777, in November at UAH 7,479, in October at UAH 7,377, in September at UAH 7,351, and in August at UAH 7,114.
According to statistics, the largest growth in the average salary of full time workers in January this year compared to January 2017 was observed in Dnipropetrovsk (32.7%), Vinnytsia (32.4%), Kyiv (32.2%), Zhytomyr (31.9%), Zakarpattia (31%), Lviv (29.4%), Zaporizhia (28.3%), Odesa (27.6%), Poltava (30.6%), Chernihiv (28.2%), Ivano-Frankivsk (27.7%), Cherkasy (27%), Kharkiv (26.9%), Kirovohrad (26.5%), Ternopil (26.4%), Sumy (25.6%), Chernivtsi and Volyn (25.4% each), Khmelnytsky (24.8%), Kherson (24.6%), Rivne (23.8%) regions and Kyiv City (25.6%).
The wage growth in Donetsk and Luhansk regions (excluding part of the ATO zone) was 29% and 19% respectively.
The largest level of wages in the past month was recorded in Kyiv (UAH 11,668), the lowest one in Chernihiv region (UAH 5,865).

HVG LAW LLP TO PROVIDE LAW SERVICES TO UKRAINIAN GAS MONOPOLIST

HVG Law LLP (the Netherlands) will provide law services to national joint-stock company Naftogaz Ukrainy related to the unbundling of the company and creation of a gas transport system (GTS) operator. According to a report in the ProZorro e-procurement system, the contract worth almost UAH 17 million (VAT included) was signed by the sides on December 27, 2018.
The expected cost of the services in the amount of UAH 65.522 million was reduced at the tender with nine bidders, which are international companies.
As reported, a legal analysis must be made for the compliance of the chosen method of separation of gas transportation activities with the requirements of the EU and Ukrainian legislation regarding the independence of the GTS operator.
The services also include providing advice and recommendations in the process of separating transportation activities in order to successfully certify the future operator in accordance with the requirements of the Third Energy Package and preparing necessary documents.
It is also the responsibility of the winner of the tender to provide recommendations on the best way to transfer to the future operator of the property, contracts, IT systems, permits and employees from the point of view of legal consequences for Naftogaz and the prospect of attracting a partner to the GTS management. In addition, the winner of the tender will participate in negotiations with potential partners of the GTS.

NEW CAR SALES IN UKRAINE GROWS 22% IN FEBUARY

The sales of new cars in Ukraine in February grew by 22% compared to the same month in 2017, but decreased by 12% compared to January 2018, amounting to 5,800 units, AUTO-Consulting reports. “Nevertheless, over the two months the car market of Ukraine continues to demonstrate quite an impressive growth of 31%, but the demand structure has changed dramatically,” experts say.
In February, Volkswagen, which managed to get ahead of both Toyota and Renault, selling 815 cars, ranked first.
“Moreover, another brand of VW Group, Audi, climbed to the fourth place (from the ninth in January). Both brands posted a 40% rise in sales just over a month. In such an unexpected way the “dieselgate” influenced the Ukrainian market,” AUTO–Consulting said.
According to analysts, in February it became finally clear that the demand for low cost cars among private buyers is vanishingly small due to competition on the part of used car imports.
Similar statistics on car sales was released by the Ukrautoprom association, according to which the rise in sales was 21% from February 2017, to 5,900 vehicles.
Leadership was also given to Volkswagen, which ranked first due to the sale in Ukraine of diesel cars produced in 2015.