The Antimonopoly Committee of Ukraine (AMCU) has identified grounds for banning the acquisition of control over lifecell group by French billionaire Xavier Niel’s DVL Telecom, a member of NJJ group.
In particular, the antitrust agency believes that it is necessary to check the relationship of control of lifecell itself and the parent company Turkcell with the person to whom the decision of the national security and defense Council of Ukraine applied personal special economic and other restrictive measures (sanctions).
“When considering applications for the acquisition of control over the group “Lifecell” by the company “DVL Telecom” arose the need to verify the relationship of control of the participants of the concentration, in particular the group “Lifecell” and the group “Turkcell” with the person to whom the personal special economic and other restrictive measures (sanctions) applied by the decision of the National Security and Defense Council of Ukraine,” – said the press service of the AMCU on Monday.
The report states that, having considered the applications on the acquisition of control by DVL Telecom over Lifecell LLC, Global Bilgi LLC and Ukrtauer LLC (lifecell group), the AMCU has identified grounds for banning the said concentrations.
“Given that the concentrations in the form of acquisition by DVL Telecom of control over Lifecell LLC, Ukrtauer LLC and Global Bilgi LLC constitute a single transaction and will take place under a single sale and purchase agreement, a separate authorization for DVL Telecom’s acquisition of control over Global Bilgi LLC cannot be granted by the Committee either,” the AMCU notes.
Considering the above, on March 7, 2024, the Committee again started consideration of the concentration cases in the form of acquisition by DVL Telecom of control over Lifesell, Global Bilgi and Ukrtauer LLC. At the same time began consideration of the case on concerted actions, which are directly related to the implementation of these concentrations, specified in the press service.
Earlier it was reported that at the meeting on March 7 AMCU allowed DVL Telecom to acquire control over Datagroup Holding Limited (“Datagroup-Volya”). In addition, the antimonopoly agency allowed concerted actions between NJJ UPAM (Paris, France), Lorimer II Ventures Limited (Nicosia, Cyprus), DVL Telecom (Paris, France) and a natural person – citizen of Ukraine in the form of implementation of provisions on refraining from competition, provided by Section 19 of the shareholders’ agreement, which will be concluded between these entities for a period of five years.
On December 29, 2023, Turkcell, a Turkish company, signed an agreement to transfer 100% of the shares, as well as all rights and debts of Lifecell LLC (TM lifecell), Ukraine’s third largest mobile operator, including contact center outsourcing company Global Bilgi LLC and tower rental service provider Ukrtauer LLC, to the French investment company NJJ Capital.
The decision to sign the agreement was made by the Board of Directors on December 20, but as early as May 9 it decided not to disclose information about the possible deal. Turkcell specified that the nominal price of Lifesell shares is UAH 12 billion 711.849 million, Global Bilgi – UAH 47.226 million and Ukrtauer – UAH 1 billion 964.04 million.
Authorized representatives of NJJ Capital (Paris, France) and Global Bilgi LLC (Kyiv, Ukraine) applied to the Antimonopoly Committee (AMCU) for authorization of NJJ Capital to indirectly acquire a part in the authorized capital of Global Bilgi, which provides for exceeding 50% of votes in the supreme governing body of the company, as well as parts providing for exceeding 50% of votes in the supreme governing bodies of Lifesell and Ukrtauer on December 29, 2023. The applications were returned to them as they did not meet the requirements set by the committee.
On January 23, 2024, AMCU received a second application to acquire the stake that provides control in Lifsell, Global Bilgi and Ukrtauer LLC from DVL Telecom, a member of the NJJ group.
According to market participants, a problem for the completion of the deal may also be the partial seizure of stakes in the companies being sold on charges against the under-sanctioned Mikhail Fridman, who indirectly controls a minority stake in Turkcell.
Ukrainian metallurgical enterprises according to the results of work in January-February of the current year increased production of total rolled products, according to operational data, by 52.5% compared to the same period last year – up to 900 thousand tons from 590 thousand tons.
According to the information of Ukrmetallurgprom association on Friday, during this period steelmaking increased by 52% against January-February-2023 – up to 1.076 million tons from 708 thousand tons.
Iron smelting increased by 42.5% to 1.050 million tons from 737,000 tons.
As reported, in January-2024 increased output of total rolled products by 75.9% y-o-y to 453,000 tons from 257,000 tons, steel by 91.6% to 544,000 tons from 284,000 tons, pig iron by 44.5% to 555,000 tons from 384,000 tons.
Ukraine in 2023 increased production of total rolled products by 0.4% compared to 2022 – to 5.372 million tons, but decreased steel production by 0.6% – to 6.228 million tons, pig iron by 6.1% – to 6.003 million tons.
Ukraine in 2022 reduced production of total rolled products by 72% compared to 2021 – to 5.350 million tons, steel by 70.7% – to 6.263 million tons, pig iron by 69.8% – to 6.391 million tons.
For 2021, 21.165 million tons of pig iron (103.6% to 2020), 21.366 million tons of steel (103.6%), 19.079 million tons of rolled products (103.5%) were produced.
Ukraine in February 2024 compared to January has increased the volume of electricity exports 12 times, but reduced the volume of imports by a third, DiXi Group reported with reference to the Energy map portal.
As noted in its report on Friday, Ukraine exported a total of 63.1 thousand MWh (5.2 thousand MWh in January – ER), of which the most – 32% (20 thousand MWh) went to Moldova. Another 30% (19.1 thousand MWh) went to Romania, 20% (12.6 thousand MWh) – to Poland, 14% (9 thousand MWh) – to Slovakia, 4% (2.4 thousand MWh) – to Hungary, to which electricity supplies were resumed after a two-year break with the introduction of joint auctions for the allocation of sections.
It is noted that after February 11, exports exceeded imports on almost all days.
However, at the end of the month, imports were 21 MWh more than exports, totaling 84.1 thousand MWh (one-third less than January’s 122.8 thousand MWh).
40% (33.6 thousand MWh) of this volume came from Slovakia, 34% (28.7 thousand MWh) – from Romania, 16% (13.6 thousand MWh) – from Poland, 7% (6.2 thousand MWh) – from Moldova, 3% (2.1 thousand MWh) – from Hungary.
DiXi Group experts point out that in February 2023 there were no exports at all, while imports were 41% higher at 141.8 thousand MWh.
They also note that last month Ukraine received five times (February 2, 4, 27-29) emergency aid from Poland, which bought back surplus Ukrainian electricity – a total of 5.9 thousand MWh.
On February 7, Ukraine accepted excessive 1.2 thousand MWh from Poland as emergency aid.
Ukraine’s economic growth will continue in 2024 on the back of expanding domestic demand and a further recovery in seaborne exports, but it will fall to 3.9% from around 5.5% last year due to the high base effect created by the past strong agricultural season, international rating agency S&P Global Ratings forecast.
“Absent a significant escalation of the war, we forecast Ukraine’s economy to grow by about 4-5% on average over the medium term, but a recovery to pre-war levels is unlikely in the foreseeable future,” it said in its release on Saturday night as it downgraded Ukraine’s long-term foreign currency rating to ‘CC’ from ‘CCC’ with a negative outlook amid an expected Eurobond restructuring.
S&P estimates that average annual inflation will fall to around 7% this year from 12.8% last year, but it will pick up in the second half of this year amid weakening base effect, recovering domestic demand and moderate currency depreciation.
The agency expects the hryvnia to depreciate to 41.02 UAH/$1 at the end of this year and to 43.89/$1 at the end of next year.
S&P emphasizes that the development of the war with Russia continues to shape Ukraine’s macroeconomic outlook. It is unclear how the war may evolve, but we believe a military stalemate without any major changes on the front lines remains the most likely scenario as both sides resign themselves to a protracted war. The prospect of any negotiated peace plan seems unlikely. As a result, we assume that the active phase of the war will last until the end of this year, and most likely beyond,” the document says.
The agency recalls that Russian troops have occupied about 15% of Ukraine’s territory, which accounts for about 8-9% of its pre-war GDP, 14% of industrial and 10% of agricultural production. Almost a third of Ukraine’s population has been displaced and about 15% have fled the country and are now refugees living mainly in the EU.
Nevertheless, according to S&P’s baseline scenario, the Ukrainian government and the NBU will maintain their administrative capacity even in the face of serious military attacks.
Given the significant damage to physical and human capital, Ukraine’s medium-term economic prospects are subject to a high degree of uncertainty, the agency notes. In its view, the key factors determining the country’s recovery prospects are the evolution of the war, post-war demographics and labor market profile, as well as the effectiveness of reconstruction efforts and continued international support.
S&P notes a high degree of uncertainty about the scope, outcome and consequences of the Russia-Ukraine war. In its view, regardless of the duration of hostilities, the associated risks are likely to persist for some time.
As reported, the National Bank of Ukraine in January estimated the country’s GDP growth in 2023 at 5.7% and maintained its 2024 growth forecast at 3.6%, slightly worsening it for 2025 – from 6.0% to 5.8%.
The government, when approving the draft state budget for the second reading in early November 2023, improved last year’s GDP growth estimate from 2.8% to 5%, but worsened it for 2024 from 5% to 4.6%.
An agreement between the Government of Ukraine and the Government of Turkey on the establishment of a system for the electronic exchange of preliminary information on goods and vehicles moving between the parties was signed in Istanbul on Friday as part of a meeting between President of Ukraine Volodymyr Zelenskyy and President of Turkey Recep Tayyip Erdogan.
“According to the document, information exchange will be carried out between the State Customs Service of Ukraine and the Ministry of Trade of Turkey. Based on the agreement, a system of electronic exchange of preliminary information will be created, through which a predetermined set of data will be exchanged in electronic form,” the press service of the President of Ukraine reports.
It is noted that the information received by the customs authorities of the parties will help speed up the movement of goods and vehicles across the borders of both states, as well as counteract customs offenses.
On behalf of Ukraine, the agreement was signed by Defense Minister Rustem Umerov, and on behalf of Turkey – by Trade Minister Omer Bolat.
Volodymyr Zelensky has arrived in Istanbul to meet with Turkish head of state Recep Tayyip Erdogan.
The airplane with the Ukrainian leader and his accompanying delegation on board landed at Ataturk Airport, Turkish media reported.
As part of the visit of the Ukrainian delegation, Zelensky will meet with President Erdogan. A joint statement of the two leaders is expected to be signed following the talks.
