The negative court decision in favor of Nikopol Ferroalloy Plant (NFP) in the case of disconnecting the enterprise from the TIU Canada solar power plant (SPP) in Nikopol will create an extremely dangerous precedent in Ukraine and will actually allow unjustified disconnection of consumers and electricity producers from the grid, says Kateryna Tsvetkova, attorney at law of GOLAV, representing interests of Ekotechnik Nikopol LLC (TIU Canada).
“Therefore, the attention of the entire world community is now riveted to this case, and it is extremely critical for investments in the Ukrainian energy sector,” Tsvetkova said at a press conference at Interfax-Ukraine on Wednesday.
The TIU Canada power plant shutdown case will be heard at the Northern Economic Court of Appeal on October 4.
As reported, on March 2, 2020, NFP completely disconnected a 10.5 MW solar power plant from Ekotechnik Nikopol LLC (TIU Canada) from the power grid. TIU Canada noted that NFP took advantage of the fact that the SPP was connected to a substation located on its territory, and explained the need for shutdown by repair work.
As a result, Ekotekhnik Nikopol LLC (TIU Canada) filed a lawsuit against NFP, Ukrenergo and DTEK Dnipro Grids with Kyiv Economic Court, which, in turn, in January 2021 rejected the company’s claims to the three listed defendants. In response to the court’s decision, Ekotechnik Nikopol filed a complaint with the Northern Commercial Court of Appeal, which opened the relevant appellate proceedings in March 2021.
A court session to consider the case took place on July 26, however, a break was announced in the session due to the absence of NFP representatives. At the same time, the retrial on the “Nikopol case” on September 8 was also postponed to October 4 due to the filing by NFP of an appeal to the Northern Commercial Court of Appeal against the January decision of Kyiv Economic Court, which NFP had previously supported.
In its appeal, NFP believes that the claim of Ekotechnik Nikopol against Ukrenergo as part of the consideration of the case in Kyiv Economic Court was piecemeal and did not contain specific claims against the company, and for this reason the case should have been considered by the Economic Court of Dnipropetrovsk region.
In turn, as noted by attorney at law of GOLAV Kateryna Manoilenko, disconnecting a subject from access to the power grid requires a certain procedure and in the case of the shutdown of the TIU Canada solar power plant in Nikopol, Nikopol Ferroalloy Plant, according to the law, had to obtain preliminary appropriate permits from Ukrenergo and DTEK Dnipro Grids.
“In this case, Ukrenergo is the operator of the transmission system. Namely, Ukrenergo should have granted or not granted permission to disconnect the Canadian investor from the grid,” Manoilenko said, calling the actions of Ekotekhnik Nikopol to determine the three defendants in the person of NFP, Ukrenergo and DTEK Dnipro Grids quite reasonable and eligible.
“The case should have been considered, and it was considered by Kyiv Economic Court. The Canadian investor believes that there are three participants – this is the main defendant – the one that carried out the illegal disconnection – NFP – as well as two others that did not take any action to protect the rights of the Canadian investor,” the attorney said.
In addition, according to Tsvetkova, NFP, when filing an appeal to the Northern Economic Court of Appeal on September 7, exceeded the 20-day deadline for filing an appeal by a participant in the case established by procedural legislation from the moment the text of the court decision was received.
“In this case, the terms of the appeal, according to the Procedural Code, ended on February 28, 2021,” Tsvetkova said.
At the same time, NFP argued for the delay in filing an appeal with the allegedly limited budget for the payment of the court fee, as well as difficulties with legal support of court cases.
At the same time, according to the annual report of PrJSC Nikopol Ferroalloy Plant for 2020, the company received UAH 456 million in net profit.
“We believe that filing such an appeal is nothing more than a delay in the consideration of the case and an abuse of one’s procedural rights,” the attorney says.
However, the Northern Economic Court of Appeal announced on September 8 that it was accepting the NFP’s complaint to the appeal proceedings.
“In connection with such a rather controversial decision of the court, we challenged this panel of judges,” Tsvetkova said.
TIU Canada has been operating in Ukraine since 2016. The company put into operation a 10.5 MW SPP in Nikopol in January 2018, an 11 MW SPP in Mykolaiv region in April 2019. In addition, TIU Canada launched a 33 MW SPP in Odesa region. The company’s investments in solar energy, which became the first investor in Ukraine under the Canada-Ukraine Free Trade Area Agreement (CUFTA), amounted to over $65 million.
Nikopol Ferroalloy Plant is controlled by EastOne Group, established in autumn 2007 as a result of restructuring of Interpipe Group, and Privat Group, both based in Dnipro.
The rating agency Expert-Rating has affirmed the financial stability rating of KSG Agro SA (Switzerland), the holding company of the agricultural holding KSG Agro, at the level of “uaA+” on the national scale (corresponds to the BBB level on the international scale), the company said in a press release on Wednesday following an audit of its activities over the first half of the year.
According to the rating agency, this assessment of the company’s performance in the first half of 2021 is due to an increase in the level of coverage by its own capital of its debt obligations, the company’s profitability and a good level of its EBITDA to available loans.
“Throughout the period from June 30, 2020 to June 30, 2021, KSG Agro’s equity capital grew by 52.46%, up to $14.47 million, including due to its profitable activity and the reduction of retained loss. For the same period the liabilities of KSG Agro S.A. decreased by 12.52%, down to $55.7 million. The decrease in liabilities of KSG Agro S.A. was mainly due to selling three subsidiary companies in May, 2021,” the rating agency said in the report.
According to it, debt obligations of KSG Agro S.A. as of June 30, 2021, decreased by 12.52% compared to June 30, 2020, to $55.69 million. Long-term loans predominated in the structure of the company’s debt obligations as of that date: their volume increased by 7.52%, to $27.25 million, whiles the volume of short-term liabilities decreased by 54.19%, to $2.91 million.
The agency noted that EBITDA of KSG Agro SA in the first half of 2021 decreased by 22.49% compared to January-June 2020, to $2.69 million. At the same time, the ratio of EBITDA to its loan obligations as of June 30, 2021 decreased by 2.03 p.p. versus the same date last year, to 8.95%, which indicates the company’s ability to service its debt obligations.
The agency’s report indicated that the current macroeconomic situation in Ukraine did not significantly affect the sales volumes of the agricultural holding’s products, in particular, its revenue in the first half of 2021 decreased by 12.1% compared to the same period in 2020, to $6.81 million. During the specified period, the net profit of KSG Agro increased 48 times, to $13.7 million, mainly due to the sale of its subsidiaries.
“Therefore, according to the results of the first half of 2021, KSG Agro S.A. demonstrated high profitability indicators,” the rating agency said.
The agency recalled that the borrower or the particular debt instrument with rating “uaA+” is characterized by a high creditworthiness compared to other Ukrainian borrowers or debt instruments.
The Cabinet of Ministers of Ukraine, at a meeting on Monday updated the list of quarantine restrictions at different levels of epidemic danger, in particular, it allowed businesses to operate in the “red” zones, subject to full vaccination of workers and visitors.
So, according to the explanation of the Ministry of Health on Facebook, there is a requirement for the mandatory wearing of masks in public buildings and transport in the “green” zone.
In the “yellow” zone, in addition to the mask mode and the need to maintain a distance, it is also prohibited:
– mass events with the participation of more than one person per 4 square meters of the area of the premises or territory;
– the congestion of cinemas and other cultural institutions by more than 50% of seats;
– the congestion of gyms and fitness centers is more than one person by 10 square meters;
– the work of educational institutions, except for those where at least 80% of employees have a “yellow” or “green” COVID certificate.
These restrictions will not apply if more than 80% of staff and 100% of visitors, except for persons under 18, are vaccinated against COVID-19 with one or two doses and have presented the corresponding certificate.
Restrictions peculiar to “yellow” zone are applied to the “orange” zone. Local authorities may impose additional restrictions.
In the “red” epidemiological zone, it is prohibited:
– the work of public catering, except for targeted delivery and take-out orders;
– work of shopping and entertainment centers, cinemas, theaters, entertainment establishments, cultural institutions, except for historical and cultural reserves, film and video filming;
– operation of non-food markets and shops, gyms, swimming pools and fitness centers;
– work of educational institutions, except for those where 100% of employees are vaccinated with two doses;
– holding mass events, except for official sports events and matches of team playing sports without spectators;
– operation of hotels, hostels, etc.
– The restrictions will not apply if all staff and all visitors, except those under 18, are fully vaccinated against COVID-19.
Expenditures on the healthcare system in the draft state budget for 2022 are provided at the level of UAH 197.2 billion, which is UAH 35.8 billion more than in 2021, according to materials presented by Minister of Finance Serhiy Marchenko.
“Expenditures on medicine next year will increase to UAH 197.2 billion, which is more than this year by UAH 35.8 billion. Funds under the Medical Guarantee program, including a COVID package, will amount to almost UAH 158 billion. In addition, it is planned to send UAH 6 billion for the public health system and vaccination of the population against COVID-19,” he said, presenting the draft law on the state budget of Ukraine for 2022 during a meeting of the Cabinet of Ministers.
In addition, the draft budget provides for funds to increase salaries for doctors and nurses.
“The average salary of a doctor is envisaged at the level of UAH 22,500, for medical personnel – UAH 14,500, while the minimum wage is at least UAH 20,000 and UAH 13,500, respectively,” Marchenko said.
In addition, according to the document, it is planned to allocate UAH 19.1 billion for highly specialized medical care, UAH 4 billion for the development of a capable network of medical institutions, UAH 2.7 billion for the purchase of equipment, UAH 2.4 billion for the support of regional medical institutions, UAH 1.5 billion for transplantation and treatment abroad, UAH 1 billion for the creation of the bio-cluster “Biological safety and development of biotechnologies.”
MPS propose to amend the state budget for 2021 and distribute UAH 38.75 billion of additional receipts, including UAH 12 billion for subsidies and UAH 15 billion for the repair of national roads.
Bill No. 6052 was registered by a group of MPs in parliament on Tuesday.
According to an explanatory note to the bill posted on the parliament’s website, it is proposed to increase receipts from corporate income tax – by UAH 30 billion, VAT on imports – by UAH 6 billion, VAT on goods manufactured in Ukraine – by UAH 2 billion, fee paid during the legal process for establishing ownership to cars – by UAH 0.75 billion.
At the expense of these additional receipts, the MPs propose to increase spending on subsidies by UAH 12 billion, to UAH 47.295 billion, according to the bill.
In addition, the MPs propose to provide for an additional amount of funding for the road infrastructure in the amount of UAH 15 billion.
“In particular, in 2021, it is planned to carry out repair and construction work on a total length of 4,500 km of state highways, but the existing funding is currently insufficient to implement these plans,” the authors of the bill said in the explanatory note.
The bill also proposes to send additional funding in the amount of UAH 2.5 billion for the construction of social and cultural facilities, transport infrastructure. Thus, it is proposed to increase the amount of subventions from the state budget to local budgets by the indicated amount.
In addition to this, the bill proposes to allocate UAH 1.5 billion from additional receipts for the construction of projects within the framework of the Big Construction state program.
Another UAH 1 billion is proposed to be used to pay off debts and pay salaries to employees of state-run mines. In addition, the MPs propose to allocate UAH 556 million to replenish the charter capital of the state-owned enterprises Boryspil International Airport, Ukraine state aviation enterprise and Ukrservice of the Transport Ministry.
Amendments to the current state budget also imply the following directions: UAH 282 million to provide housing for 215 internally displaced persons who defended the sovereignty of Ukraine, UAH 280.5 million for timely settlements with dismissed military personnel, UAH 176.8 million for providing prisons with food and settlements for utilities, UAH 86.9 million for a budget program for the development of an emergency medical care system and modernization of the material and technical base of healthcare institutions, as well as UAH 10 million for additional circulations of the Uriadovy Kurier newspaper.
The Cabinet of Ministers of Ukraine has extended the validity of green COVID certificates from 180 to 365 days.
The corresponding decree was published on the government website.
