The National Bank of Ukraine has increased the financing opportunities for foreign representative offices of Ukrainian companies: previously, this was possible within the limits of actual transfers in 2021, but now it is possible either within these limits or up to EUR 1 million per year, whichever is greater.
“This relaxation will not affect Ukraine’s currency market, as such transfers will only be allowed using the business’s own currency. At the same time, it will enable Ukrainian companies to step up their efforts to promote their products on foreign markets,” the National Bank said on its website on Saturday.
The regulator has also allowed such transfers for relatively young companies, setting a restriction that at least 12 months must have passed between the date of their state registration and the date of the transaction.
“In the long term, the changes will contribute to the growth of the country’s export potential by expanding cooperation between Ukrainian businesses and foreign partners and increasing trade,” the NBU said.
In addition, the central bank has allowed payments related to legal proceedings for non-compliance by non-residents with the terms of import and export contracts.
“The decisions adopted allow legal entities of all forms of ownership to purchase foreign currency and transfer it abroad to pay registration, arbitration, court fees, and other payments and expenses during enforcement proceedings for non-compliance by non-residents with the terms of import and export contracts,” the National Bank explained.
He added that, based on a customer survey conducted by banks this year, the impact on the currency market is not expected to be significant. On the other hand, businesses will be able to protect their property and other rights and interests in foreign jurisdictions in a timely and adequate manner when resolving issues related to the return of foreign currency proceeds under export contracts or prepayments under import contracts.
The NBU clarified that the relevant amendments to “military” Resolution No. 18 of February 24, 2022, were introduced by Resolution No. 53 of the regulator’s board on May 9 of this year and came into force on May 10.
The Steering Board of the Ukraine Investment Framework, set up by the EU on April 17 under the Ukraine Facility instrument, has allocated more than EUR1bn of funding to de-risk investments, mainly of small and medium-sized enterprises in Ukraine, through International Financial Institutions (IFIs) and banks, Ukraine’s Deputy Economy Minister Oleksiy Sobolev said.
“That is, this year, financing for SME development will be enough,” he said at Ukraine’s Future Summit in Brussels on April 18.
Sobolev called for more active trade and joint ventures with Ukrainian companies, because the above mechanism will provide leverage and additional guarantees.
“Thanks to the Ukraine Plan and Ukraine Facility, you will have available financing for business expansion in Ukraine, and what we need right now will be available. This year it will be available through Ukrainian banks and through MFIs: EBRD, EIB, IFC, KfW”, – said the Deputy Minister of Economy.
He specified that about 20 Ukrainian banks participate in these programs.
“So, in fact, you can apply to your Ukrainian bank, and he will provide additional financing to your companies,” – explained Sobolev.
Thanks to coordinated cooperation with international partners, Ukraine has managed to attract more than $39 billion in external financing since the beginning of 2023, compared to $32.1 billion for the entire last year, Ukrainian Finance Minister Sergii Marchenko said.
“By the end of this year, donor assistance will reach about $42.3 billion,” he was quoted as saying in a release from the Finance Ministry on Wednesday after a meeting the day before with the heads of central banks of the G7 countries, the leadership of the European Union, the IMF and the World Bank.
Marchenko also noted that Ukraine’s need for external financing in 2024 was reduced from the initial $41 billion to $37.3 billion due to measures to maximize state budget revenues, activate the domestic debt market, and reduce all capital expenditures of the state budget.
The Minister of Finance emphasized that in 2024, the priorities for financing are the military campaign and social support, the former to be provided exclusively at the expense of domestic budget revenues, and Ukraine is counting on the help of partners to finance the latter.
The desired amount of external financing in 2024, including grants, mentioned by Marchenko, was confirmed in the materials of the International Monetary Fund (IMF) based on the results of the second review of the EFF program. “Support from official donors will remain the main source of financing the deficit next year,” the Fund emphasized.
He noted that net financing through the placement of domestic government bonds, although significantly lower, will also remain an important source of financing, amounting to $3.8 billion under the baseline scenario.
“Net domestic market issuance and the use of unencumbered deposits also serve as an important shock absorber and are easier to increase quickly compared to external financing. However, the risks associated with this financing plan are significant, and it is important that guaranteed external financing is provided in a timely manner,” the IMF said.
According to the materials of the second revision of the EFF program, the United States is expected to receive $8.5 billion, Japan – $2 billion, the United Kingdom – $1 billion, and another $20.4 billion from the EU, Canada and Japan.
Earlier, Marchenko clarified that Ukraine expects to receive EUR18 billion from the EU in 2024 as part of the Ukraine Facility, which is being discussed and is expected to total EUR50 billion for 2024-2027.
Ukraine has received $1.3 billion in additional emergency financing from the International Monetary Fund (IMF), Prime Minister Denys Shmyhal has said.
“$1.3 billion of additional emergency financing from the International Monetary Fund has arrived in Ukraine. The funds will be used to finance priority needs: strengthening defense capabilities, paying pensions, social programs and supporting the economy,” Shmyhal wrote on his Telegram channel on Thursday.
According to him, in general, since the beginning of the full-scale war, the IMF has provided Ukraine with $2.7 billion.
“Also, in the near future, we will start preparing a new special program with the Fund, which will start working next year. We thank our partners and allies for their unwavering support,” the prime minister said.
The shareholders of PJSC “Production Association” Stalkanat “(Odessa) intend to raise financing in the form of a loan or other financial instruments in the amount not exceeding UAH 1 billion for a period of not more than 5 years.
Such an issue is included in the agenda of the extraordinary general meeting of shareholders scheduled for October 14 of this year, which will be held remotely. The decision to hold the meeting was made by the Supervisory Board of the company on September 26 this year.
At the meeting, the shareholders intend to agree to the receipt by the company of credits / loans (acceptance / receipt of monetary obligations, other financing, funds / obligations), overdrafts, guarantees, letters of credit and / or any other banking products / services by concluding relevant agreements and additional agreements thereto.
At the same time, the amount of attracted financing cannot exceed UAH 1 billion with a term of such obligations of no more than 5 years, but no later than September 1, 2027.
In addition, the shareholders intend to agree to pledge/mortgage the company’s property (real, movable) and/or conclude other agreements to ensure the fulfillment of obligations in the amount of not more than UAH 1 billion.
As reported, the general meeting of shareholders held on September 3, 2021 decided to separate from PJSC “Stalkanat-Silur” and create a new company – PJSC “Stalkanat” with the transfer of part of the property, rights and obligations to it in accordance with the approved distribution balance.
Director General of Stalkanat-Silur Sergey Lavrinenko explained earlier to the Interfax-Ukraine agency that all shares of Stalkanat PJSC being created are distributed among all shareholders of Stalkanat-Silur PJSC. The shareholders agreed to spin off the Stalkanat company, to which the Odessa industrial site will be transferred. In turn, PJSC “Stalkanat-Silur” will also remain, on the balance sheet of which will be “Silur”, located in a temporarily uncontrolled territory (Khartsyzsk, Donetsk region).
PJSC “PA “Stalkanat-Silur” (Odessa) previously had two branches – in Odessa and in Khartsyzsk, Donetsk region on the tubing. “. Later, the management of PJSC “PA” Stalkanat-Silur “announced the seizure of the company’s branch in Khartsyzsk on the NKT, sent a corresponding statement to the National Police.
According to the NDU, for the fourth quarter of 2021, David Nemirovsky (Ukraine) owns 50.0001% of the company’s shares, Anton Mikhalenko – 23.7%, Edery Liron (both Israel) – 23.1%.
The authorized capital of Stalkanat-Silur is UAH 26.083 million.
The International Finance Corporation (IFC), part of the World Bank Group (WB), plans to submit a $1 billion financing package for Ukraine to its Board of Directors in November, including direct lending, financial guarantees and trade finance instruments, the Deputy Minister said. economics Alexander Griban.
“It is expected that such financing will also mobilize private loan capital, because IFC usually finances no more than 30% of the project cost, including commercial banks in the financial consortium. Thus, the total volume of projects of Ukrainian enterprises that can be financed will be more than $ 3.3 billion,” he was quoted in a press release from the Economy Ministry on Friday.
Hryban added that IFC is also actively working with the European fund for sustainable development (EFSD), which has already received a request for $2 billion. According to him, these funds are also planned to be used to introduce financial instruments to support Ukraine.
