Odesa Port-Side Plant in October would announce a new tender to select a supplier of natural gas for processing on tolling terms, acting Head of the State Property Fund (SPF) of Ukraine Vitaliy Trubarov has said.
“As are as I understand, the tender will be announced again next month and maybe there are economic entities, possibly foreign ones, that could supply their own gas, and the enterprise could operate,” he told journalists in Odesa on the sidelines of the Ukrainian Financial Forum organized by the ICU investment group.
The head of the SPF said that the final decision on the tender is taken by the company management, since representatives of the SPF are members of the supervisory board and do not have the right to interfere in the economic activities of the enterprise.
Trubarov said that in the current market conditions, the attraction of the supplier of gas on tolling terms is the only opportunity of operating for Odesa Port-Side Plant, since “gas that occupies more than 90% of the production cost is quite expensive, and the prices for end products are subsiding.”
According to him, the conditions of the tender to select the company are absolutely open, and the difficulty to select it is the absence of a large number of interested companies.
He said that the SPF is extremely interested that the plant is operating at the time of the privatization work.
“Our task in this matter is to build the work in a way that at the time of sale this asset was operating, alone or with the help of a supplier of natural gas for processing on tolling terms, but operating. Selling an idle enterprise, in my opinion, is a double problem,” the SPF head said, recalling the even more complex problem of toxic debts of the Odesa Port-Side Plant to the structure of Dmytro Firtash.
Fitch Ratings has affirmed the Ukrainian City of Kyiv’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B-‘, Fitch Ratings said in a press release on September 21. Simultaneously Fitch has upgraded Kyiv’s National Long-Term Rating to ‘A(ukr)’ from ‘A-(ukr)’. The Outlooks are Stable.
Fitch said that the upgrade of the National Rating reflects the improvement in Kyiv’s credit strength following the exchange of $101.15 million of the non-restructured part of $250 million LPN due in 2015 for new LPN due in 2022.
Fitch has also assigned PBR Kyiv Finance PLC’s $115.072 million loan participation notes (LPN) due December 2022 a ‘B-‘ rating.
“The issuer is the city’s financial SPV, and the LPN were issued on a limited recourse basis for the sole purpose of financing a loan made to the city. Thus they represent direct, unconditional, unsecured and unsubordinated obligations of Kyiv and at all times rank pari passu with all its unsecured and unsubordinated obligations,” Fitch said.
As was reported, Kyiv’s 2015 eurobonds were included in the perimeter of the debt operation envisaged by the International Monetary Fund’s Extended Fund Facility (EFF). They included two issues of eurobonds: 10-year $250-million eurobonds maturing on November 6, 2015, with a coupon rate of 8% per annum and five-year $300-million eurobonds maturing on July 11, 2016, with a coupon rate of 9.375% per annum.
On November 23, 2015, Kyiv offered bondholders to exchange its eurobonds for sovereign eurobonds of Ukraine falling due in 2019-2020 and state derivative securities. In keeping with the offer, one bond with a nominal value of $1,000 was to be swapped for two sovereign eurobonds maturing in 2019 and 2020 whose face value is $375 each and a rate of 7.75% per annum and state derivatives with a conditional value of $250. Interest accrued on the bonds was to be capitalized and added to the principal amount of new bonds.
As part of a debt restructuring operation, the government of Ukraine on December 18, 2015, allowed the conversion of Kyiv’s debt on 2015 eurobonds worth $117.394 million and 2016 eurobonds worth $233.672 million into state debt.
The restructuring of the 2015 eurobonds was backed by 59.51% of their holders and that of 2016 eurobonds – by 90.9%. According to a source of Bloomberg, the 2015 eurobond offer was rejected by London-based Franklin Templeton Inv Mgmt Ltd., which held 32% of 2015 eurobonds. After that, according to available information, negotiations were held with that creditor.
Kyiv City Council on September 4, 2018 completed the restructuring of its outstanding foreign debt by exchanging eurobonds with a yield of 8% and maturing in 2015 with a total nominal value of $101.149 million for new loan participation notes (LPN) falling due on December 15, 2022, with a yield of 7.5%
The aggregate state (direct) and state-guaranteed debt of Ukraine in August 2018 decreased by 1.14%, or by $0.86 billion, to $74.85 billion, according to the website of the Ministry of Finance. In the national currency the state debt grew by 4.49% or UAH 91 billion, to UAH 2.117 trillion.
Since the beginning of the year, the aggregate state (direct) and state-guaranteed debt in U.S. dollar terms declined by 1.91%, or by $1.46 billion, in the hryvnia by 1.17%, or UAH 25.01 billion.
The Ministry of Finance said that public debt in August rose by 4.54%, to UAH 1.83 trillion (in dollars it decreased by 1.09%, to $64.71 billion), and external debt grew by 6.69%, to UAH 1.071 trillion (in dollars it grew by 0.94%, to $37.87 billion).
The state-guaranteed debt for the past month grew by 4.18%, to UAH 286.78 billion (in dollars it fell by 1.43%, to $10.14 billion), in particular external debt by 4.37%, to UAH 273.57 billion (in dollars it declined by 1.25%, to $9.67 billion).
The ministry said the principal amount of the national debt is denominated in U.S. dollars – 43.5%, another 30.24% in the hryvnia, 16.32% in special drawing rights, and 8.78% in euros. In addition, less than 1% of state debt is denominated in Canadian dollars and yen.
The official hryvnia exchange rate, using which the Finance Ministry calculates the debt, in August fell to UAH 28.28/$1 from UAH 26.76/$1, or 5.7%, while by the end of 2017 it was UAH 28.07/$1.
The State Property Fund of Ukraine (SPF) has announced repeated tenders to select advisors for preparing the following companies for privatization: 99.9988% stake in OJSC Oriana, 99.9952% in PJSC Sumykhimprom and 100% in National Joint Stock Company Ukragroleasing. “To privatize companies for which there no tender was held, and only one bid was submitted, we announced a new tender to select advisors. Next month there will be a repeated tender,” Head of the SPF Vitaliy Trubarov told journalists in Odesa on the sidelines of the Ukrainian Financial Forum organized by the ICU investment group.
According to their terms, bids for participation in the tenders are accepted until the end of the day on October 17. The first stages of the tenders are scheduled for October 23, and the second – for October 26.
“Unfortunately, during the summer period many investment advisers could not be prepared for unbiased reasons,” Trubarov said, expressing hope that the repeated tenders will be success.
He also recalled that for the selection of an adviser for the privatization of Azovmash, the State Property Fund did not receive a single bid, and now, according to the requirements of the new law on privatization, the fund will prepare it for sale without involving an adviser.
Batkivschyna Party Leader Yulia Tymoshenko believes that Ukraine should switch from the crony economy to the social market economy, transform the economic model based on raw materials into the economy of innovative development. “This is a global trend, which was adopted as the basis and the main strategic line, including by the European People’s Party, which member Batkivschyna has been for more than ten years. A harmonious combination of free entrepreneurship with the interests of society is necessary. Today it is obvious that the market cannot be absolutely self-regulating and work in the interests of the public. It has weaknesses in the form of monopolism, ignoring the interests of the development of society, the paradigm that the strongest survives any way,” Tymoshenko said on Friday, September 21, during the presentation of the New Economic Course of Ukraine.
She said that the state should create equal rules for all. “Say “no” to monopolies. They eat any economic system, like any monopoly in any sphere of society’s life. It will be dismantled. We will finish the story with monopolies, including clans,” the leader of Batkivschyna Party said.
Tymoshenko said that the goal for this should be the accelerated economic growth with an annual rate of at least 7%, and the main driving force for all economic changes in the country should be a creative intellectual entrepreneurial class.
The leader of Batkivschyna Party said that the tasks of the monetary policy should be stabilization of the hryvnia, a reduction in inflation, the development of small banks, the introduction of long-term low-interest loans for business, and the control of the National Bank by society.
“And the speculative adventures that have been and are being conducted at the National Bank will be the subject of separate criminal investigations after the change of power: about $13 billion in four and a half years was deduced from the budget of Ukraine, from the banking system of Ukraine on the basis of speculative operations. We got almost as much, a little less, from the IMF [International Monetary Fund]. We need to remove the criminals from the National Bank who killed our currency, destroyed our economy and continue to make money on our grief,” Tymoshenko said.
One troy ounce=31.10 grams
