KYIV. July 25 (Interfax-Ukraine) – S&P Global Ratings has affirmed its ‘B’ long-term corporate credit rating on Kernel Holding S.A., a Ukraine-based producer and exporter of sunflower oil and grains, the outlook remains stable, reads a report on the rating agency’s website.
“At the same time, we affirmed our ‘B’ issue rating on Kernel’s five-year $500 million eurobond maturing 2022. Our affirmation reflects mainly that, despite Kernel’s acquisition of Ukrainian Agrarian Investments SA (UAI), its credit metrics are still in line with our projections when we assigned the ratings in January. Our previous base case already incorporated an acquisition of that magnitude, which largely explains why there is no impact on the group’s financial ratios. From a business perspective, the UAI acquisition has transformed Kernel into the largest land bank operator in Ukraine, with more than 605,000 hectares. This will help Kernel significantly reduce its dependence on third-party raw materials,” S&P experts stated.
“Because Kernel’s business model is already vertically integrated, we are confident that, by adding these additional 192,000 hectares of high-quality land, the group will create cost synergies that we have not yet incorporated into our model. By strengthening its farming operations, the group should be able to somewhat smoothen the seasonality inherent to its processing operations. Moreover, the increasing number of silos will enable Kernel to expand its logistic territorial network. Despite all the positive aspects that UAI’s integration will bring to Kernel, we have not revised our assessment on the group’s competitive position,” the document reads.
“The acquisition has strengthened the group’s exposure to Ukraine, which we view as having a high-risk corporate environment. Nevertheless, Kernel has a leading market position in sunflower oil processing, which is a large industry in Ukraine thanks to soil and climate conditions, as well as the robust operating performance of the group’s farming division, which should benefit from UAI’s integration. Kernel’s vertically integrated operation continues to support efficiency and decreases, in our view, the volatility of the group’s profitability. UAI enjoys a similar profile in terms of structure of operations, with a modern and productive fleet of machinery and similar cluster organization, allowing fast decision-making. We also view positively that both entities withstood the country’s biggest economic and financial crisis in the past decade,” the agency experts said.
KYIV. July 25 (Interfax-Ukraine) – Pivdenmash (Dnipro) is expanding its participation in the programs of the European Space Agency (ESA), will continue the delivery of serial engines for the fourth stage of the European light carrier rocket Vega.
The company reported on its website “the documents on the continuation of the Vega project in the medium term” have been recently signed.
A source in the Ukrainian rocket and space industry told Interfax-Ukraine the Ukrainian and European sides extended till 2020 the contract for the delivery of engines for the fourth stage of the Vega RD-868P carrier rocket developed by Pivdenne Design Bureau and produced by Pivdenmash.
“The contract with Avio SpA has been prolonged until 2020,” the source said, adding that “the details of the contract were not revealed.”
The Vega carrier rocket was developed by the ESA together with the Italian Space Agency (ASI). It is designed for launching to a solar-synchronous orbit with a height of 1,200 km of satellites weighing up to 1,200 kg or to a polar orbit with a height of 700 km of satellites weighing 1,500 kg.
National energy company Ukrenergo has decided to annul contracts with Tilihulska wind power plant LLC and Azovinvestprom LLC on connecting their wind power plants to the company’s power grid over the long-lasting standstill of the projects, the press service of Ukrenergo has reported.
“It was decided to annul contracts with Tilihulska wind power plant LLC and Azovinvestprom LLC and warn other contractors that the terms for submitting the required documents to review the terms and extend contracts are expiring,” the company said.
Ukrenergo said that the reservation of the capacity without real construction of power plants results in the fact that new investors cannot connect to power grids.
Tilihulska wind power plant LLC planned to build a wind power plant with a capacity of 500 MW in Mykolaiv region and Azovinvestprom – with a capacity of 42.5 MW in Zaporizhia region.
The company said that today there is a risk of failure to implement the contracts by EuroCape Ukraine I (the wind power plant with a capacity of 500 MW in Zaporizhia rergion) and Energopark Yavoriv LLC (the solar power plant with a capacity of 63 MW in Lviv region).
KYIV. July 24 (Interfax-Ukraine) – Investments in the reconstruction of Chudniv Elevator AIK LLC (Zhytomyr region) to increase its grain storage capacity amounted to more than UAH 100 million, according to the website of the agro-industrial development department of Zhytomyr Regional State Administration.
According to the report, after reconstruction grain storage capacity at the complex increased by 2.5 times, to 30,000 tonnes.
The enterprise plans to increase grain storage capacity to 50,000 tonnes by the end of this year.
Chudniv Elevator AIK LLC was established in 2014. It is part of the AIK group of companies, which is engaged in production of agricultural goods, their storage and sales.
KYIV. July 24 (Interfax-Ukraine) – Business contracts totaling more than $40 million have been signed during the Ukrainian-Belarusian business forum held on July 21 within the framework of the official visit to Ukraine of Belarusian President Alexander Lukashenko, the press service of the Ukrainian Chamber of Commerce and Industry has said.
According to the report, in general, 16 commercial contracts were signed during the forum held at the Ukrainian Chamber of Commerce and Industry, which was attended by over 300 Ukrainian and 90 Belarusian companies.
Among the signatories were Gomselmash, Technotorg Don, Ukravtozapchastyna LLC, Belarus-Ukraine Trade House, Baranovichi Cotton Production Amalgamation, Biltex LLC, Vostok-BELAZ-Service LLC, Novotroitske quarry management company, BelAZ, ArcelorMittal Kryvyi Rih, Mogilevliftmash, Karat-Liftkomplekt LLC, foreign investment company BNH Ukraine, and Eridon.
According to the chamber, the problems of lending and insurance of export supplies, prospects for using electronic trading platforms, increasing transport supplies, entering CIS markets, as well as the issues related to scientific and technical cooperation, the agro-industrial complex caused the greatest interest of both countries’ businesses.
One of the main priorities of cooperation is the development of joint projects in machine building.
KYIV. July 24 (Interfax-Ukraine) – The volume of construction work in Ukraine in June 2017 increased by 31.9% compared with June 2016, while the growth in May 2017 from May 2016 was 24.5%.
According to the State Statistics Service, the data are given without taking into account the temporarily occupied territory of Crimea and Sevastopol and part of the ATO zone. Data on Donetsk and Luhansk regions could be reviewed.
According to the agency, the volume of construction works in June 2017 from May 2017 increased by 13.4%, whereas in May 2017 from April 2017 it grew by 11%.
According to the report, the growth in construction work in June 2017 compared to June 2016 was observed in all areas of construction. The largest increase in the figure was recorded in construction of engineering facilities – by 49.7%.
According to the service, in May 2017 from April 2017 the volume of construction work in construction of residential buildings declined by 6.1%, non-residential buildings by 18.6%, and in construction of engineering facilities grew by 17.1%.
In January-June 2017 on January-June 2016 a decline in construction works was recorded in three regions: Luhansk (by 17.1%, to UAH 225.1 million), Mykolaiv (11.5%, UAH 762.4 million) and Chernivtsi (8.4%, UAH 380.7 million).
The largest growth of construction works in January-June 2017 year-over-year was seen in Kirovohrad (1.8-fold, to UAH 415.1 million) and Zhytomyr (1.8-fold, to UAH 521.5 million) regions.
