Business news from Ukraine

IFC READY TO INVEST IN UKRAINIAN UKRGASBANK

Top managers of the International Finance Corporation (IFC) at a meeting of the National Investment Council of Ukraine in Davos (Switzerland) has confirmed their readiness to consider investment in the capital of state-owned Ukrgasbank, Head of the Office of the National Investment Council Yuliya Kovaliv has said.
As reported, in November 2017, Ukraine’s Ministry of Finance agreed on cooperation with the International Finance Corporation (IFC) in the process of privatization of Ukrgasbank. The memorandum of cooperation also envisaged a possibility of entering the capital of the bank by IFC to support its sale. The investment will depend on several factors, including the outcome of the due diligence of the bank.
Ukrgasbank was established in 1993 and as of January 1, 2017 the state represented by the Ministry of Finance owned 94.9% of its shares. Since 2015, the bank has been included in the list of state-owned facilities of strategic importance for the economy and national security.

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SWITZERLAND VIA IFC TO PROVIDE $1.8 MLN TO SUPPORT ENERGY EFFICIENCY REFORMS IN UKRAINE

The International Finance Corporation (IFC, the division of the World Bank Group) and the Swiss State Secretariat for Economic Affairs (SECO) have signed an agreement to facilitate energy efficiency renovations in Ukraine’s residential sector.
According to a posting on the website of the IFC, Switzerland will provide up to $1.8 million to IFC Advisory Services to support legal reforms that will support energy-efficiency refurbishments by engaging with housing management companies on behalf of homeowners’ associations.
According to the report, the initiative represents the third and the final phase of IFC’s Residential Energy Efficiency Advisory project in Ukraine, which started in partnership with SECO in 2010.

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INTERNATIONAL FINANCE CORPORATION TO PROVIDE TO UKRAINIAN TOMATO PASTE PRODUCER $17 MLN LOAN

The International Finance Corporation (IFC) on June 1 signed a contract to provide the largest Ukrainian vertically integrated tomato paste producer, Agrofusion, with a long-term loan of $17 million. According to information on the IFC’s website, the funds are intended to expand the company in 2018-2019 and refinance its obligations. The total cost of the project is estimated at $30 million.
The IFC said this is the third project with Agrofusion.
Agrofusion is the largest vertically integrated producer of tomato paste in Ukraine. It was founded by businessman Serhiy Sypko in 2007. Agrofusion includes three tomato paste production plants with a total production capacity of about 750,000 tonnes of tomatoes per season, as well as agribusinesses in Kherson and Mykolaiv regions, cultivating 25,000 hectares of irrigated land, and two hothouse farms. In 2017, the company expanded its capacity and reached 79,443 tonnes of paste (64,800 tonnes in 2016). Some 70% of its products are exported to 35 countries.

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IFC SIGNS $42.5 MLN LOAN AGREEMENTS WITH ASTARTA, NYVA PEREYASLAVSCHYNY

The International Finance Corporation (IFC) from the World Bank group has signed loan agreements on the provision of financing to the largest sugar producer in Ukraine Astarta for the amount of $30 million and the large pork producer Nyva Pereyaslavschyny for $12.5 million.
“Agribusiness is a priority for IFC globally, and Ukraine is very important to our strategy in the sector,’ Stephanie von Friedeburg, IFC’s chief operating officer, said during a signing ceremony in Kyiv.
According to the press release, IFC’s financing will support a two-year investment program aimed at improving the company’s resource efficiency and competitiveness by modernizing its sugar plants. This would help reduce the use of gas, electricity, and water. The program also aims to help Astarta—which grows and trades grain and oilseed—purchase modern and efficient farm machinery and construct of new storage facilities.
IFC is providing long-term debt financing to support Nyva’s investment program, which includes constructing a new meat-processing facility that will become one of the country’s first to comply with European Union standards for food safety and animal welfare. The company will also build a new pig farm and a rendering plant capable of recycling up to 50 tonnes of waste every day, helping to reduce its environmental footprint.
This is IFC’s second investment in Nyva.
Pork production in Ukraine remains inefficient and highly fragmented, with many smaller producers lacking sufficient quality controls, IFC said.

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INTERNATIONAL FINANCE CORPORATION COULD PROVIDE $17 MLN LOAN TO AGROFUSION

The International Finance Corporation (IFC) could provide a long-term corporate loan of $17 million to the largest tomato paste and industrial tomato producer in Ukraine, the Agrofusion Group. According to a posting on the website of IFC, the funds are provided to finance the company’s 2018-2019 expansion and debt refinancing program.
The total cost of the project is $30 million. The project is pending approval.
IFC said that this will be the third project with Agrofusion. Agrofusion Group, founded in 2007, belongs to businessman Serhiy Sypko. Agrofusion includes three tomato paste production plants with the processing capacity of about 7500,000 tonnes of tomatoes per season, as well as farms in Kherson and Mykolaiv regions, processing 25,000 hectares of irrigated land, and two greenhouse farms.

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COMPETITION AGENCY PERMITS IFC TO BUY THREE ELEVATORS IN UKRAINE

The Antimonopoly Committee of Ukraine has permitted the International Finance Corporation (IFC) from the group of the World Bank to acquire three elevators of Mriya agroholding in Ternopil region as part of the debt restructuring.
According to the decision of the committee posted on its website, the permit was given to IFC to buy assets belonged to Noria West private enterprise, Black Bryony Holdings LLC and Elagri-Derenivka LLC.
As reported, Mriya and IFC in May 2017 agreed on the terms of restructuring of the holding’s debt. The parties agreed to split the debt into a secured and unsecured part. They also stipulated terms for restructuring the secured part of the debt. Mriya’s unsecured debt to IFC will be restructured on common conditions for all unsecured creditors.
Mriya’s total debt is $1.087 billion, of which $46 million is loans for working capital, $7 million for leasing of agricultural machinery, $130 million is secured loans, and $904 million is unsecured loans.
After the restructuring, the amount of secured loans will be reduced to $62 million, unsecured ones to $213 million.
Mriya is a vertically integrated agro-industrial holding founded by Ivan Huta in 1992. Today, its land bank is 165,000 ha in Ternopil, Khmelnytsky, Ivano-Frankivsk, Chernivtsi, Lviv and Rivne regions. The capacity of its grain storage facilities is estimated at 380,000 tonnes.

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