Business news from Ukraine

Ferrexpo appoints new independent director

Ferrexpo, a mining company with assets in Ukraine, has appointed Stuart Brown, formerly of De Beers, as an independent non-executive director to its board of directors.

According to the company’s information on Monday, Brown took office on October 22.

Ferrexpo also reports that Graeme Dacomb, who has been a member of the board of directors since May 2020, will resign from the board at the end of this year. It is clarified that Dacomb is currently the chairman of the audit committee, and Brown will take over from January 1, 2024, which will provide the necessary time for an orderly transfer of functions. Brown is also appointed as a member of the Audit Committee upon his appointment to the Board of Directors.

The press release states that Brown is an experienced mining executive with extensive board-level experience. He previously held the positions of CFO and CEO at De Beers and its various subsidiaries. Most recently, he served as President and CEO of Mountain Region Diamonds Inc. listed on the Toronto Stock Exchange and CEO of Firestone Diamonds Plc, formerly listed on the AIM of the London Stock Exchange.

It is also reported that after Brown’s appointment, the number of independent directors will increase to five, two of whom are women. After Dacombe’s resignation at the end of this year, the number of independent directors will be reduced to four.

Ferrexpo is an iron ore company with assets in Ukraine.

Ferrexpo owns a 100% stake in Yeristovo Mining, 99.9% in Bilanivsky GOK and 100% in Poltava Mining.


Ukrainian developers predict housing prices

The transition to a regime of managed exchange rate flexibility has not yet affected housing prices in the primary market, but it may change the behavior of potential buyers, and the rise in the dollar in the future may affect construction costs, according to Ukrainian developers interviewed by Interfax-Ukraine.

“We do not expect any sharp price fluctuations in the primary market. Pegging to the current US dollar exchange rate is a standard practice among developers. That is, in case of a significant depreciation of the hryvnia against the dollar, prices for square meters in the national currency equivalent will indeed increase. However, we do not see any reasons for this at the moment,” Anna Laevska, Commercial Director of Intergal-Bud, told the agency.

According to her, in the short term, the cost per square meter will be mainly influenced by the dynamics of real demand and the cost of construction.

At the same time, the rise in the dollar may lead to higher prices for contractors’ services and construction materials, said Dmytro Novikov, marketing director of City One Development.

“At present, we do not see any prerequisites for a rapid rise in prices in the primary real estate market. Even if the dollar rises in value, there will be no significant changes in the primary market in the near future. But it may have an impact in the future: if the cost of construction materials, which are directly tied to the currency, rises, the cost of construction will certainly increase,” he said.

Daria Bedia, Marketing Director of DIM Group, expressed a similar opinion.

“The pricing policy in the primary market is always closely linked to exchange rate fluctuations, as a large percentage of contractor services and the cost of construction materials, for example, are tied to the US currency. If the exchange rate rises significantly, it will create an additional burden on the cost of construction, which will push the price up,” the expert said.

At the same time, the rhetoric about the “rise in prices” against the background of a flexible exchange rate is nothing more than a marketing ploy and an attempt to persuade buyers to buy, she noted.

“There will be no rapid growth in this case, taking into account the constraining factors,” Bedia believes.

In case of a dollar appreciation, developers will be able to slow down the growth of costs only with the help of previously purchased stock of building materials, said Irina Mikhaleva, marketing director of Alliance Novobud.

“We can say for sure that with the further growth of the dollar, the cost of primary materials will also increase, primarily in hryvnia equivalent. The cost of construction will also increase, as manufacturers and suppliers of services and building materials will raise prices. The only way to slow down the growth of costs may be the stocks of building materials that were purchased earlier and are now at the disposal of builders,” she said.

Ms. Mikhaleva noted that the market reaction can be predicted only if the dollar gradually rises, without sharp jumps.

For their part, KAN Development believes that even a sharp fluctuation in the exchange rate will have a minor impact on the housing market.

“Even a sharp fluctuation in the exchange rate, if it affects the cost of real estate, will not significantly affect the housing market. If the hryvnia drops by 10%, it will strengthen later. Government mortgage programs will not be suspended and will continue to be issued in hryvnia. As for new housing, developers will continue to adjust to the market price in dollars. So far, we do not see any factors that could sharply collapse the hryvnia,” the developer commented.

According to the Kovalska Group’s press office, the transition to exchange rate flexibility may have an indirect impact on demand and may slow down the pace of recovery in the real estate market amid a general decline in purchasing power.

“For example, buyers who have savings in another currency and are ready to buy today may postpone their purchase decisions until the exchange rate is “better”, and buyers who are considering purchasing under government and partner programs such as eOselya, preferential mortgages, etc. may go to the secondary market in search of cheaper housing due to “uncertainty”,” the developer noted.

Susanna Karakhanyan, Head of Sales at Greenville Group, also spoke about the likelihood of changing the behavior of potential buyers.

“For those who are now thinking about buying a home, a window of opportunity is opening to invest before the exchange rate gains speed and starts to grow after the commercial one. This situation is likely to accelerate investors who are ready to pay the full price immediately,” the expert told the agency.

In addition, the situation has become unpredictable for those who planned to take out a long installment plan to buy a home.

“While the NBU exchange rate was unchanged for more than a year, investors could clearly calculate their payments. Now the situation will be unpredictable. Therefore, developers will try to take control of the situation: for example, to fix the exchange rate for a certain period in order not to lose a buyer and demonstrate loyalty,” Karakhanyan said.

As reported, on October 3, the National Bank of Ukraine switched to a regime of managed exchange rate flexibility.

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Andriy Pashchuk assumed duties of Director of Economic Security Bureau of Ukraine

Andriy V. Pashchuk has taken office as Director of the Economic Security Bureau of Ukraine. Andriy Pashchuk has been working in the BEB since November 2022, he was appointed as the winner of the competition for vacant positions of full-time employees of the BEB, who have special titles.
Now the Acting Director of the BEB will carry out the overall coordination and control of the activities of the central apparatus (CA) and territorial departments (TS) of the BEB and ensure the fulfillment of other tasks stipulated by the Law of Ukraine “On the Bureau of Economic Security of Ukraine”.
Eduard Fedorov was dismissed by the relevant order of the OEB by agreement of the parties on August 14, 2023.

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Ukrainian government approves new director of state-run enterprise Izmail Commercial Sea Port

The Government of Ukraine has approved the candidacy of Vitaly Levchenko for the post of director of the state enterprise “Izmail Sea Commercial Port” (Odessa region).
“Approve the candidacy of Levchenko Vitaly Oleksandrovych for the post of director of the state enterprise “Izmail Sea Commercial Port”, – follows from the government decree of May 30 No. 481-r.
Previously Levchenko held the post of chief dispatcher of the sea port “Olvia” (Mykolaiv region). He started his career as a road and track worker at Mykolaiv port. He worked in the wagon group, as a docker, crane operator, stevedore, process engineer, deputy chief dispatcher.
Previously Izmail ICC since September 2012 was headed by Andrey Erokhin.
Izmail ICC is located in the water area of Kiliya mouth of the Danube River. It connects the countries of Central and Southern Europe with the Black and Mediterranean Seas.
As of May 9, 2023, annual plan for cargo handling in port Izmail was performed in the amount of 6.187 million tons, which is a record high in the history of the enterprise. In 2022 transshipment increased to 8.89 million tons from 4 million tons a year earlier.


Former Antonov general director arrested

The Security Service of Ukraine reports the arrest of former Antonov general director Serhiy Bychkov and head of the aviation security unit Oleksandr Netesov in the Mriya destruction case, while former deputy general director Mikhail Kharchenko has been put on the wanted list.
In a telegraph channel on Friday, the Ukrainian security service said it had gathered a solid evidence base on the former Antonov general director, his deputy and the head of the aviation security unit.
“According to the materials of the investigation, on the eve of a full-scale invasion, the officials did not allow members of the National Guard of Ukraine to enter the territory of the Gostomel airport to prepare for its protection. Such criminal actions led to the temporary seizure of a strategically important airfield, surrounding settlements and the destruction of the AN-225 Mriya aircraft,” the report stresses.
The SBU claims that during January-February 2022, officials explicitly prohibited the Ukrainian military to erect defensive fortifications and fortifications at the airfield, for this purpose an order was given to block the access of the National Guard fighters to the territory of the facility.
Based on the collected evidence, investigators of the Main Investigative Directorate of the SBU reported all three defendants on suspicion under Part 2 of Article 114-1 of the Criminal Code of Ukraine (obstruction of the legitimate activities of the AFU and other military formations in a special period, resulting in the death of people and other grave consequences).
“Two persons involved in the proceedings were selected a measure of restraint in the form of detention. Comprehensive measures are taken to bring to justice the former deputy director general of the SE “Antonov”, who is now hiding from justice. He is wanted,” the SBU informs.
“We are conducting an objective investigation of this case. Those who actually helped the enemy to destroy one of the symbols of Ukraine should suffer the deserved punishment. And the SBU will do everything necessary for this. And our state will definitely build a new plane, because the Mriya, just like Ukraine, cannot be destroyed,” the head of SBU Vasyl Malyuk said in the message of the special service.
As a law enforcement source clarified to the Interfax-Ukraine news agency, Kharchenko, a wanted former deputy director of Antonov, is probably now in Crimea.

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Semyon Kryvonos becomes director of National Anti-Corruption Bureau of Ukraine

The Cabinet of Ministers has appointed Semyon Kryvonos, head of the State Architecture and Urban Planning Inspectorate, as director of the National Anti-Corruption Bureau of Ukraine (NABU).
The decision was made at an extraordinary government meeting on Monday.
In addition to Kryvonos, the meeting considered the candidates Sergei Gupyak and Roman Osypchuk, who were also transferred to the government on the results of the tender.
“Having received all the necessary materials of the selection committee, the government has carefully studied these materials for each candidate and has made a personal acquaintance with each candidate in equal conditions,” said Prime Minister Denis Shmygal.
At the same time he stressed that with the specified appointment Ukraine had fulfilled all seven recommendations put forward when the country received the status of EU candidate as well as fully established anti-corruption infrastructure.
According to government decree No 192 of March 6, Kryvonos was appointed NABU director for a seven-year term.

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