Business news from Ukraine

UKRAINE, AZERBAIJAN DISCUSS AZERI LIGHT OIL SUPPLY TO EUROPEAN REFINERIES

Ukraine and Azerbaijan at a meeting of the bilateral working group for energy issues on June 14 in Baku discussed delivery of oil from Azerbaijan to Ukrainian and European oil refineries, the press service of Ukraine’s Energy and Coal Industry Ministry has reported. “The sides discussed the state of the implementation of a project to supply various types of oil to Ukrainian oil refineries and to the countries of the Central and Eastern Europe,” the ministry said.
The involvement of Ukraine to the implementation of the Southern Gas Corridor project was also discussed.
As reported, Ukraine increased imports of crude oil (foreign trade code 2709) by 36.8% or 102,260 tonnes in January-May 2018 year-over-year, to 380,196 tonnes.
The State Fiscal Service reported that oil for $205.489 million was imported, which is 66.8% more than in January-May 2017 ($123.194 million).
Ukraine in January-May 2018 imported crude oil for $194.853 million from Azerbaijan, $7.176 million from Algeria, $1.844 million from Iran and $1.616 million from other countries.

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RUBIZHNE CARDBOARD MILL SEES 17% RISE IN OUTPUT IN JAN-MAY

Rubizhne cardboard packaging mill in Luhansk region, one of Ukraine’s largest cardboard packaging producers, produced 101.98 million square meters of corrugated cardboard boxes in January-May 2018, including goods from its Trypilsky packaging plant, which is 17.3% up year-over-year.
The mills increased production of components of corrugated cardboard (cardboard and fluting) by 7.1%, to 122,200 tonnes.
The total commodity amount produced by both plants in the period in monetary terms grew by 35.3%, to UAH 2.262 billion.
According to UkrPapir association, cardboard packaging production in Ukraine in January-May 2018 grew by 8.4% and amounted to 416.9 million square meters.
The Rubizhne cardboard packaging mill has worked on the packaging market since 1991, and specializes in the production of components for corrugated cardboard (cardboard and fluting) and corrugated cardboard boxes.
Its most important customers are large confectioneries, juice and tobacco producers.
The Rubizhne cardboard packaging mill acquired Trypilsky packaging plant in 2002 and subsequently began producing corrugated cardboard and corrugated packaging.

SMART MARITIME GROUP STARTS BUILDING TANKER HALL FOR DUTCH VEKA SHIPBUILDING

Smart Maritime Group (SMG) of Smart-Holding starts implementing a contract to build two chemical tanker hulls under an order of Dutch VEKA Shipbuilding WT B.V. The press service of SMG reported that the ribbon-cutting ceremony for the start of building the first hull for the Dutch customer was held at the Kherson Shipyard on Thursday. According to the contract signed in May, SMG will build hulls, install pipeline network, deck equipment and paint the tanker hulls. The cost of the contract is estimated at over UAH 145 million (some $5.6 million). It will take 11 months and a half to build one hull. The second tanker hull will be built at Mykolaiv Shipyard belonged to SMG.
“This is really an important event for Ukrainian shipbuilding, since it is the first foreign contract in the industry since 2013. We have made great efforts to convince the customer, to convince Ukrainian and European banks to finance this project. Today we have good prospects for work and the conclusion of new contracts,” the press service said, citing Director General of SMG Vasyl Fedin.
Tankers are designed for transportation of petroleum products and chemicals on the inland waterways of Europe. The vessel’s overall length is 110 m, width is 13.5 m, the height of the side is 6.59 m, the hull is 1200 tonnes, and the cargo capacity is 5,320 tonnes.
According to the press service, SMG and VEKA Group cooperate in the shipbuilding market for more than 10 years. During this period, SMG has built eight hulls for chemical tankers for VEKA. In total, 12 vessels of the same class were built for the Dutch market.

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DEFICIT OF UKRAINE’S FOREIGN TRADE GROWS 1.5-FOLD IN JAN-APRIL

The deficit of Ukraine’s foreign trade with goods in January-April 2018 grew 1.5-fold year-over-year, reaching $1.423 billion ($968.6 million in January-April 2017), the State Statistics Service reported on Tuesday. In April, the deficit was $221.6 million, while in March – $460 million, in February – $457 million and in January – $284.1 million.
In January-April 2018, exports of goods grew by 12.8% year-over-year, to $15.457 billion, and imports – by 15.1%, to $16.88 billion.
In April 2018 compared with the previous month seasonally adjusted volumes of exports fell by 3.6% and imports – by 1%. The seasonally adjusted deficit of foreign trade in April 2018 was $577.7 million, in March it was $473.9 million, in February 2018 – $352.9 million and in January – $519.9 million.
As a result, the coefficient of coverage of imports by exports was 0.92 (in January-April 2017 some 0.93).
The service said foreign trade operations were conducted with partners from 210 countries.

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OPIC APPROVES $250 MLN LOAN FOR NAFTOGAZ

The Overseas Private Investment Corporation (OPIC) on June 14 approved $250 million in political risk insurance for national joint-stock company Naftogaz Ukrainy covering its revolving gas purchase facility. OPIC said on its website that this will help Naftogaz build up gas reserves during the summer months to maintain a reliable supply and affordable prices. Earlier OPIC said that it is planned that the relevant loans, the total amount of which can reach $270 million, will be attracted by Naftogaz from Goldman Sachs International and other international financial institutions.
OPIC said the implementation of the project will allow Naftogaz to purchase gas in the amount of up to 4% of the annual consumption of Ukraine at an attractive price for its subsequent sale in the autumn-winter period.
Naftogaz Ukrainy unites the largest oil and gas producing enterprises of the country. The holding is a monopolist in transit and storage of natural gas in underground storage facilities, as well as oil transportation via pipelines throughout the country.

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U.S. TRIDENT ACQUISITIONS RAISES OVER USD 201 MLN ON NASDAQ FOR FURTHER ACQUIRING ENERGY ASSETS IN UKRAINE

U.S. Trident Acquisitions Corp organized as special purpose acquisition company (SPAC) held an initial public offering (IPO) on the NASDAQ stock exchange and raised $201.25 million. According to a posting on the company’s website, a total of 20.125 million units were sold at $10 per unit. Each unit consists of one share of common stock and a warrant to purchase one share of common stock. Both units and its parts could be traded. U.S. Chardan Capital Markets organized the deal.
Trident Acquisitions Corp COO Oleksiy Tymofeyev (former head of Smart-holding) wrote on his Facebook page that over 400 international investment funds took part in the placement.
The IPO for SPAC units foresees the placement of the raised funds on the account of a special trust until the object of the deal is identified (merger, acquisition, share exchange, purchase of shares and other transactions). The issuer intends to invest the raised funds in acquisition of energy assets in Eastern Europe with focus on Ukraine. “I want to build a large vertically integrated Eastern European corporation in the sphere of minerals with the center in Ukraine,” ex-Russian Duma Deputy and Trident Acquisitions Corp Director Ilya Ponomarev said in an interview with the Ekonomichna Pravda publication. He also does not rule out the purchase of assets in Northern America.
At present, Trident Acquisitions Corp is studying the assets for deals. Later, the company with which Trident Acquisitions Corp will merge would be traded on NASDAQ.
According to the offering memorandum, Trident Acquisitions Corp was founded in March 2016. Initially U.S. VK Consulting, Inc., under control of Russian investment banker Vadim Komissarov, bought all shares in the company.
In April 2016, 35% of shares were bought by Ponomarev, 5.35% – Patimat Akhmedova, 5% close relative of Mikheil Saakashvili – Timur Alazania, Komissarov has 5%, 0.8% each were bought by Tymofeyev, former coal industry minister of Ukraine Viktor Topolov and Head of U.S. McLarty Associates Edward S. Verona.
Then some deals were signed and the co-owner of Ukrainian ATB-Market retail chain Gennadii Butkevych became the holder of 10% of the company.
“They are my friends and acquaintances. They all have very different shares. Timur Alazania – he helps us with international relations as one of the leaders of the UN Secretariat in the past. Viktor Topolov left the shareholders before the IPO. Butkevych, he is one of the five members of the board of directors, but this is only about 3.5% of the total value of the company,” Ponomarev said.

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