Ukraine has a set of advantages for attracting significant investments and localizing modern production of global brands, with only security guarantees and accession to the EU required, Rostyslav Shurma, Deputy Head of the Office of the President of Ukraine, said on the air of the national marathon “United News”.
According to him, Ukraine’s prospects are well illustrated by the example of the dialog with Sweden.
“Sweden has very good not only military technologies, but also, first of all, engineering technologies. This is a very wide range. Therefore, Sweden has the entire range of machine building, a complete portfolio, and this is critically important for the reconstruction of Ukraine, because first of all, we will need a huge amount of equipment – both for infrastructure and for the construction of new enterprises and factories,” the deputy head of the OP noted.
He emphasized that such equipment is sold not only as engineering solutions, but also together with financial packages, which are usually provided through export credit agencies, and this is one of the issues being addressed today during negotiations with the Swedish side.
“We are talking about billions of dollars, but the main focus should be on the private sector. Our task is to create conditions that make it profitable for companies to come to Ukraine. We have very qualified people and a large set of mineral resources. We have all the conditions to carry out full-fledged rising of production from Southeast Asian countries to Ukraine. Two main factors remain: security (victory in the war, security guarantees and further accession to NATO) and EU accession (unimpeded access to markets and financing and a set of reforms that we are currently working on). In fact, this is the formula for big projects, great recovery, and a new economy,” added Rostyslav Shurma.
Agroholding “Kernel”, taking into account the continuation of Russia’s war against Ukraine, in the spring of 2023 initiated an extension of waivers (waivers) for another year – until June 30, 2024, the company said in a statement on the Warsaw Stock Exchange.
“At the moment, the process of agreeing such an extension with the majority of creditors is still ongoing. However, the Group has signed either 1) temporary moratoriums (standstills); 2) extensions; or 3) new waivers and consents (consents) under all credit facilities, pending final agreement with those lenders with whom extensions have not yet been finalized,” Kernel pointed out.
Agroholding noted that interest will continue to accrue and be paid in accordance with the terms of the loan agreements. “The company is also currently paying and intends to continue paying interest on the Eurobonds,” the release said.
“Kernel” recalled that earlier such waivers (Waiver Letters) in order to maintain stability and preserve business and assets for a period until June 3- June 2023 were signed in respect of, inter alia, loans of Natixis PXF, ING PXF, EBRD and EIB. Under these, the agroholding has obtained a deferral of any principal repayment, a waiver of specified potential or actual defaults or events of default arising from the war in Ukraine, but has been paying interest.
It is stated that the group has already agreed with those creditors that have not yet signed new waivers and consents, the principal terms of the extension of the terms until June 30, 2024, which are subject to final documentation and approval by the respective credit committees of each creditor. Their principal conditions, in addition to extending the maturity date to June 30, 2024, are the establishment of a capital expenditure basket sufficient to support the current scale of operations and the commencement of a shareholder support process in the form of a new capital injection of at least $60 million.
As of July 31, Kernel had $1 billion 445 million of interest-bearing debt (principal amount of bank loans and Eurobonds, excluding accrued interest and lease obligations), $1 billion 148 million of cash and cash equivalents and $327 million of inventory (including 1 million 282,000 tons of grain, 103,000 tons of oilseeds, 147,000 tons of sunflower oil and 111,000 tons of sunflower meal).
A substantial portion of the accumulated liquidity will be spent in fiscal year 2024 (FY, effective July 1, 2023 – IF-U) on working capital, capital expenditures for the development of an alternative export route across the Danube, repair of facilities, damaged as a result of Russian missile strikes, to complete construction and commissioning of an oil extraction plant in western Ukraine, and to address the maintenance backlog as a result of liquidity preservation measures taken in FY2022-FY2023, it said.
According to it, the group is considering investments in rolling stock, grain transshipment on the Danube River and river fleet to ensure a monthly export volume of about 300,000 tons with an estimated capital expenditure of about $50 million. The group does not have access to credit limits at banks, relying on accumulated cash, however, it continues to negotiate with various financial institutions for credit lines for working capital or capital expenditure. The uncertainty of future VAT refunds and the possible risk of hryvnia devaluation increase the risk of significant currency losses, Kernel adds.
Regarding the delisting, the intentions of which were first announced in early March this year, the company points out that on May 15 it filed an application with the Polish Financial Supervisory Authority (PFSA), and on July 13 it submitted to the PFSA an additional legal memorandum and other documents requested by the regulator. Kernel then sent a letter to the PFSA on Aug. 1 objecting to the applications filed with the regulator in the case.
“At the time of publishing this report, the company has not received any further information on the timing of the PFSA’s decision,” it said.
Kernel Agroholding was the world’s number one producer of sunflower oil (about 7% of global production) and its exporter (about 12%) before the war. It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in growing agricultural products and their realization.
The largest co-owner of Kernel through Namsen Ltd. – is Ukrainian businessman Andriy Verevsky, who this year increased his stake from 41.3% to 74.05% as part of the buyout and delisting of the agroholding from the Warsaw Stock Exchange.
Kernel’s net profit for the first nine months of FY 2023 (July-2022-March 2023) rose 36% to $437 mln, while revenue fell 45% to $2.715 bln.
Agro-industrial holding Astarta, the largest sugar producer in the country, has completed harvesting of early grain crops on the area of 57 thousand hectares and harvested 330 thousand tons of total winter and spring crops, including 271 thousand tons of winter wheat and 56 thousand tons of rape, the press service of the agricultural holding reported.
According to the report, the average yield of winter wheat amounted to 6.3 tons/ha, which is 33% higher than last year’s figures. The maximum average yield was obtained by agrofirm “Khmelnytske” of Vinnitsa region – 7.4 t/ha on the area of 6000 hectares, and on the area of 1350 hectares the yield reached 8.4 t/ha.
In addition, the enterprises of the agricultural holding threshed 56 thousand tons of winter rape, with a record average yield for the last five years – 4.1 t/ha. The maximum indicator of over 5 tons per hectare on the area of 1310 hectares was obtained on the fields of agrofirm “Poltavazernoprodukt” in Poltava region.
Agroholding also in early August began sowing campaign of winter crops for the harvest of 2024. 12 thousand hectares are allocated for rape, the sowing of which is already being completed, and 54 thousand hectares for winter wheat.
Preparations for harvesting soybeans, sunflower, corn, and sugar beets continue.
“Astarta” is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes six sugar factories, agricultural farms with a land bank of 220 thousand hectares and dairy farms with 22 thousand cattle, an oil extraction plant in Globino (Poltava region), seven elevators and a biogas complex.
In the first half of 2023, Astarta’s revenue from sales of key products increased by 64.8% year-on-year to UAH 10.72 bln. The main contribution was made by sales of sugar – UAH 3.27 bln, which increased by 75.5%, corn – UAH 2.66 bln (+53.2%) and soybean meal – UAH 1.96 bln (+84.5%).
Prime Minister of Ukraine Denys Shmyhal met with Romanian Prime Minister Marcel Ciolacu in Bucharest.
“In terms of bilateral trade, Romania ranks third among European countries for Ukraine. In Bucharest, we discussed with Prime Minister Marcel Ciolacu how we can develop trade potential that is beneficial for both our countries. Particular attention was paid to the development of the Danube ports and Black Sea trade routes. We hope that expert consultations and joint work will make it possible to abandon restrictive measures on the export of Ukrainian grain after September 15. This is important for our economy and global food security,” Shmyhal wrote on his Telegram channel.
Also, according to the prime minister, Ukraine offered Romania to implement a pilot project of joint border and customs control at one of the border crossing points.
“We also invite Romanian companies to use Ukrainian underground gas storage facilities, the largest on the continent. We discussed the potential for cooperation in the commercial supply of electricity between our state-owned companies,” Shmyhal wrote.
ABH Holdings SA (ABHH, Luxembourg), the former owner of the nationalized Sens Bank (Kyiv, formerly Alfa-Bank), rejects as deliberately false the accusations of the National Police of Ukraine against the holding’s minority shareholder Mikhail Fridman of allegedly organizing a criminal tax evasion scheme through Sens Bank.
“Friedman has never been involved in the management or governance of Sens Bank and has never participated in the structuring and implementation of any transactions or operations of the bank, including those related to taxation,” ABHH claims.
The holding believes that such allegations, in particular those concerning ABHH itself, are false and were made with the sole purpose of preventing the holding from achieving a fair and honest resolution of the situation that arose after the illegal, in its opinion, expropriation of Sens Bank.
ABHH reminded that in June of this year it informed the Ukrainian government of its intention to initiate international proceedings and proposed negotiations to resolve the dispute peacefully, but the reaction was to impose sanctions against the holding.
“In July of this year, the holding made another attempt to approach the Ukrainian government with a request for negotiations. The Ukrainian authorities responded by nationalizing Sens Bank and introducing a number of illegal measures against the holding’s minority shareholders, which have now been supplemented by information about a possible criminal case against Mikhail Fridman,” the statement said.
The statement emphasizes that the holding confirms its intention to continue efforts to protect its rights and considers the current actions of the Ukrainian authorities to be an attempt to obstruct the process of international justice.
Several schemes were used to withdraw the funds: payment of royalties for the use of trademarks and payment of funds under fictitious agreements concluded with offshore companies. As part of this criminal proceeding, a total of nine people were notified of suspicion, and assets worth over UAH 14.4 billion were seized. Alfa-Bank is currently nationalized and owned by the state.
Earlier on Friday, the National Police issued a statement that its Strategic Investigations Department, the Bureau of Economic Security and the Prosecutor General’s Office had established criminal schemes by Friedman and other beneficial owners from the international sanctions list to withdraw more than UAH 700 million through controlled Ukrainian and Cypriot companies and Alfa-Bank.
It was indicated that one of these schemes was the withdrawal of funds under the guise of paying royalties for the use of trademarks previously owned by the parent bank in the Russian Federation. Over three years, the Ukrainian bank paid UAH 1.4 million, but in 2021, the trademarks were re-registered to a Cypriot non-resident controlled by a Russian oligarch, after which the fee increased to $16.4 million, and in less than a year of using these marks, the bank transferred more than UAH 261 million to the Cypriot company.
The offenders also allegedly used a scheme to pay out funds under fictitious agreements concluded with offshore companies. The essence of such transactions was that the offshore company, the parent company of Alfa-Bank, bought corporate rights and transferred more than UAH 460 million to the phantom company. However, as law enforcement officers found out, this company had no property and conducted no business activities.
The National Police stated that more than 300 investigative actions were carried out to establish the connections, affiliation and control of the companies, both offshore and Ukrainian, used in the schemes, to the Russian oligarch: searches, interrogations of dozens of witnesses, various studies and examinations, analysis of a large amount of information, etc.
“Based on the evidence collected, the Russian oligarch, the beneficial owner of Alfa-Bank and the organizer of the criminal scheme, was served a notice of suspicion. He is charged with committing criminal offenses committed as part of an organized group by prior conspiracy under several articles of the Criminal Code of Ukraine,” the National Police said.
It was clarified that a total of eight other people were served suspicion notices in the criminal proceedings: the former chairman and acting chairman of the bank’s board, three owners of offshore companies, and the case against three directors of fictitious companies is already being considered in court.
In addition, more than UAH 14.4 billion worth of assets were seized: securities held on the bank’s accounts, trademarks, and about 900 real estate properties.
Alfa-Bank has been nationalized and is now owned by the state, and the seized assets have been transferred to the commercial management of the ARMA, the release said.
Ukraine is finalizing a scheme with global insurers for insurance coverage of grain ships, Ukraine’s deputy economy minister Oleksandr Hryban has told the Financial Times
Ukraine is finalizing the development of a scheme with global insurers for insurance coverage of grain ships traveling to/from Black Sea ports, Ukrainian Deputy Economy Minister Oleksandr Griban told the Financial Times.
According to him, the agreement “is being developed and actively discussed” between the relevant ministries, as well as domestic banks and international insurance groups, including Lloyd’s of London.
The scheme could be in place as early as next month, with five of the 30 ships passing through “dangerous locations” in Ukrainian waters.
Russia reportedly pulled out of the Black Sea Grain Initiative in July and said it would treat any civilian vessel leaving Ukrainian ports as a military target.
However, under the cover of Ukrainian coastal defense systems, the Joseph Schulte dry cargo ship left the port of Odessa on August 16 and used a temporary corridor in the Black Sea. On August 18, it arrived at the coast of Turkey and anchored in the port of “Ambarly” near Istanbul. The container ship Joseph Schulte was in the port of Odessa since February 23, 2022. On its board there were 2000 containers and 30 thousand tons of cargo, in particular food.
Earlier, Ukraine announced the creation of a “humanitarian corridor” in the Black Sea to free cargo ships trapped in its ports after Russia’s withdrawal from the “grain agreement”.
