The holding company Kyivmiskbud has analyzed the projects and decided that, subject to the approval of the Kyiv City Council of the mechanisms and sources of financing, starting from the third quarter of 2024, it is possible to start their gradual unfreezing, said Vasyl Oliynyk, Chairman of the Board and President of Kyivmiskbud, at a meeting of the temporary commission for resolving problematic issues related to the activities of PrJSC Kyivmiskbud.
“During this month and a half (after his appointment – IF-U), we managed to inspect all construction addresses – we have 25 of them, 120 buildings in total – analyze the state of affairs in the company and, together with the team, determine the directions we plan to move in order to stabilize Kyivmiskbud. We have physically measured all the scope of work, which allows us to plan. We are facing challenges, among which the search for funding sources is a priority,” he said.
According to Mr. Oliynyk, the actual stabilization plan for Kyivmiskbud will depend on the amount of funds raised.
He clarified that several options are being considered. In particular, cooperation with the utility company Zhytlo-Invest, which can purchase a certain number of apartments under the Rent to Own program. According to the analysis, the existing volume of apartments in the completed facilities allows to raise about UAH 500 million.
In addition, it is proposed to transfer several completed and commissioned kindergartens to the city. According to Oliynyk, since they were built earlier, these buildings need to be adapted to meet increased safety requirements. If the city agrees to buy out these kindergartens after the refurbishment of the shelters, it will give Kyivmiskbud another UAH 200-300 million to complete the facilities.
At the same time, this amount (UAH 700-800 million) will only be enough to restart several sites. To fully unfreeze the facilities, about UAH 2 billion a year is needed, and in total, as previously announced, about UAH 4 billion in 2024-2025.
“We are negotiating with state-owned banks Ukrgasbank and Sens on lending under state guarantees and collateral. The key may be to increase the authorized capital of Kyivmiskbud, and if Kyiv City Council members support this issue, it would be a real help,” Oliynyk outlined the real mechanisms for resuming the company’s work.
He added that currently, each month of downtime costs the company about UAH 10 million (stabilization of facilities, taxes, etc.).
According to Oliynyk, if the necessary funding is accumulated, the launch of all facilities, starting with five, is possible in the summer of 2024.
As reported, in March 2024, the Kyiv City State Administration set up a temporary commission to resolve problematic issues related to the activities of PrJSC HC Kyivmiskbud.
An audit of the company conducted in 2023 by state-owned Baker Tilly Ukraine Consulting, NHD-AUDIT LLC and Ernst & Young LLC found no signs of actions to bring it to bankruptcy, concealment of financial insolvency or massive transactions by related parties. At the same time, the auditors found that Kyivmiskbud’s operations were disrupted by external factors: COVID-19, a full-scale war, and the Ukrbud factor. On November 17, 2023, the Kyiv City Council Commission approved an interim report with recommendations and proposals for the developer’s further work, including the purchase of apartments in Kyivmiskbud’s facilities, consideration of a financial loan or additional capitalization of the company. The commission also recommended that the Kyiv City Council address the Cabinet of Ministers on the issue of compensating Kyivmiskbud for the total planned loss associated with the completion of Ukrbud’s projects in the amount of UAH 2.28 billion.
HC Kyivmiskbud was established on the basis of the property of the state municipal construction corporation Kyivmiskbud in 1994 by merging controlling stakes in 28 enterprises and other assets in its authorized capital. The holding company consists of 40 joint-stock companies in which the company owns shares, six subsidiaries and 51 companies as associate members.
According to the National Securities and Stock Market Commission (NSSMC), the main shareholder of PrJSC HC Kyivmiskbud is the Kyiv City Council (80%).
