The Ukrainian Exchange (UX) on Friday decided to exclude from its exchange list the shares of Ukrnafta and Motor Sicha, which were alienated in favor of the state by a November 6 decision of the Supreme Commander-in-Chief’s Staff.
“The following securities have been excluded from the Exchange list since Nov. 14, 2022 due to the lack of free float of shares: MSICH – Motor Sich and UNAF – Ukrnafta,” the message on the exchange website reads.
Earlier this week, these shares were excluded from the exchange basket.
Despite the alienation of all shares on November 6, there are still applications for the purchase of “Ukrnafta” shares on the Exchange, and their price rose to 377 UAH per share, although the day before the alienation of shares were quoted at 229.69 UAH per share, which corresponds to the capitalization of about 12.5 billion UAH.
“Ukrnafta had 22.85% in the index basket, while Motor Sich had 33.06%.
As reported, the rate of Supreme Commander in Chief on November 5 decided to withdraw shares of Ukrnafta, Ukrtatnafta (excluding the share of Naftogaz of Ukraine), Motor Sich, AvtoKrAZ and Zaporizhtransformator as military property of the state during martial law. This was done on November 6 after the regulator regulated the procedure by the National Commission for Securities and Stock Market.
In Ukrnafta, the controlling interest belongs to Naftogaz of Ukraine, while the minority stake of about 42% belongs to the so-called Privat Group owned by Igor Kolomoyskyy and Gennady Bogolyubov, while in Ukrtatnafta (Kremenchug refinery) the situation is reversed.
The circulation of all shares of Motor Sich, the largest owner of which was the recently arrested president of the company Vyacheslav Boguslayev, has been blocked since April 2018 after the sale of a controlling stake in the Chinese Skyrizon and related parties a year earlier.
“AvtoKrAZ” and “Zaporozhtransformator,” controlled respectively by Konstantin Zhevago and Konstantin Grigorishin, have been in bankruptcy proceedings for the past few years.
“The Ukrainian Exchange was founded on May 15, 2008 by the leading participants of the Ukrainian securities market together with the Russian Stock Exchange RTS, which later merged with the Moscow Exchange. UB was the first to launch an order market, Internet trading, repo market, central counterparty settlement and futures market. However, in mid-July 2018, the exchange suspended trading in all securities in a no-address order mode due to a ban on the use of Moscow Exchange software in its operations.
In March 2019, UB announced that it would resume trading in the bid market on a new platform.
The exchange is currently among the three largest securities traders on the Ukrainian market.
The law “On the transfer, compulsory alienation or seizure of property under the legal regime of martial law or state of emergency” and the order of the Supreme Commander-in-Chief of the Armed Forces of Ukraine dated 6 November “On the decision of the Supreme Commander-in-Chief’s headquarters dated 5.11.2022” have become the grounds for the National Commission for Securities and Stock Market Resolution that concerns the order of such alienation of the shares of five enterprises.
According to a copy of the NCSSM decision dated November 6, which is available to the Interfax-Ukraine news agency, there were also five corresponding orders issued by the commander of the AFU Logistics Force for the compulsory alienation of property – shares in Ukrnafta, Ukrtatnafta, Zaporizhtransformator, Motor Sich and AvtoKrAZ.
According to the decision of the Commission, the securities account, on which the shares are alienated (except for the shares owned by Naftogaz), will be managed by the Ministry of Defense.
The Commission also pointed out that the operation on alienation of shares should be carried out despite the existence of other burdens on circulation of shares.
The said law implies that in case of impossibility of preliminary full compensation, such property shall be forcibly alienated under martial law with subsequent full compensation of its value within the next five budget periods after the cancellation of martial law at the expense of the state budget.
Assessment of property subject to compulsory alienation shall be carried out in the manner prescribed by law on the assessment of property, property rights and professional valuation activities, says the law.
As reported, the National Commission on Securities and Stock Market (NSCSM) decision of November 6 settled the issue of depositary records of depositary operations for forced alienation of shares into state ownership, the issuers of which are PJSC “Ukrnafta”, PJSC “Ukrtatnafta”, “Motor Sich” JSC, PJSC “AvtoKrAZ” and PJSC “Zaporozhtransformator.
In addition, on the same day the National Commission for Securities and Stock Market allowed meetings of joint stock companies during martial law, if the number of shareholders does not exceed five and if they own 100% of the shares, while until recently it only allowed remote meetings.
In Ukrnafta, the controlling stake belongs to Naftogaz Ukrainy, while the minority stake of about 42% belongs to Igor Kolomoysky and Gennady Bogolyubov’s so-called Privat Group, while in Ukrtatnafta (Kremenchug refinery) the situation is the opposite.
The circulation of all shares of Motor Sich, the largest owner of which was the recently arrested president of the company Vyacheslav Boguslayev, has been blocked since April 2018 after the sale a year earlier of a controlling stake in the Chinese Skyrizon and related parties.
“AvtoKrAZ and Zaporizhtransformator, controlled respectively by Konstantin Zhevago and Konstantin Grigorishin, have been in bankruptcy proceedings for the past few years.
AVTOKRAZ, FOREIGN TRADE, MOTOR SICH, nationalize, UKRNAFTA, ЗТР, УКРТАТНАФТА
Prosecutors of the Specialized Anti-Corruption Prosecutor’s Office and detectives of the National Anti-Corruption Bureau have informed eight persons of suspicion involved in the embezzlement of property and funds of Ukrnafta in the amount of over UAH 13 billion, the SAP press service reports.
“In the course of the pre-trial investigation, it was established that the officials of five commercial enterprises, by prior collusion with the officials of PJSC Ukrnafta, in particular the acting chairman of the board and the heads of two structural units of the enterprise (positions indicated at the time of the crime), which in Violation of the requirements of the current legislation, which provides for advance payment for the supply of oil without its implementation during March-August 2015, placed in favor of commercial enterprises oil with a total value of more than 10 billion hryvnias, which the officials of these enterprises took possession of, causing losses to PJSC “Ukrnafta” for the specified amount,” the Telegram channel said.
It was also established that in July 2015, Ukrnafta officials concluded 52 contracts with a commercial enterprise for the supply of oil products in the amount of over UAH 2.5 billion for the benefit of Ukrnafta, which, in turn, made advance payments in full. However, in the future, “Ukrnafta” entered into additional agreements to postpone the delivery of oil products until the end of 2018, which as a result, the commercial enterprise never delivered, and the officials of the commercial enterprise took possession of the money paid in advance and transferred it to the accounts of non-resident enterprises.
The actions of the suspects are classified under Part 5 of Art. 191 (seizing someone else’s property by abusing an official’s official position, by prior collusion by a group of persons, in particularly large amounts) of the Criminal Code of Ukraine.
The specified actions are punishable by deprivation of liberty for a term of seven to 12 years, with deprivation of the right to hold certain positions or engage in certain activities for a term of up to three years, and with confiscation of property.
In January 2022, PJSC Ukrnafta increased oil and condensate production by 5.6% (by 6,900 tonnes) compared to the same period in 2021, to 130,500 tonnes, the company’s press service reported on Monday.
According to it, gas production increased by 3.6% (by 3.3 million cubic meters), to 94.5 million cubic meters.
In addition, production of liquefied gas in January 2022 at the company’s plants increased by 10% (by 990 tonnes) compared to January last year, to 10,870 tonnes.
Ukrnafta clarified that the increase in production is associated with efficient operation of the existing well stock and a reduction in equipment downtime. In addition, commissioned oil well No. 103 at the Verkhnomaslovetske field (Lviv region) had a positive effect on production activities.
“Ukrnafta is making efforts to increase hydrocarbon production, particularly of natural gas. This is an important task both in terms of supplying the domestic market with natural gas during high seasonal demand and for strengthening the country’s energy independence in the long term,” the company said.
Ukrnafta owns 85 special permits for production of hydrocarbons, and has 1,809 oil and 153 gas wells on its balance sheet. The company owns 537 filling stations.
NJSC Naftogaz Ukrainy owns 50% plus 1 share of the largest oil producing company in the country, and a group of companies associated with the former shareholders of PrivatBank owns about 42% of the shares.
The process of unbundling the assets of PJSC Ukrnafta between NJSC Naftogaz Ukrainy and minority shareholders has been put on hold for now, although it was planned to be completed at the end of 2021, businessman Ihor Kolomoisky has said.
“Yes, on a pause… Naftogaz faced the problem of public opinion, government, the like, they need to get permission for some significant transactions, and so on,” he said in an interview with Ukrayinska Pravda.
According to the businessman, Naftogaz was the initiator of the unbundling process, and he supported it.
“Since life together does not work out, it is necessary to separate intelligently and culturally,” he said.
Earlier, at the end of November, President of Ukraine Volodymyr Zelensky said that the unbundling of Ukrnafta did not take place, since the state did not yet have the necessary funds to buy the assets.
As reported, in November-December 2021, due to the lack of a quorum, two meetings were not held at which it was planned to consider the issue of unbundling Ukrnafta’s assets between NJSC Naftogaz Ukrainy and minority shareholders – Ihor Kolomoisky and his partners. Another meeting of shareholders with a similar agenda is scheduled for February 17, 2022.
Ukrnafta is the largest oil company in the country. NJSC Naftogaz Ukrainy owns 50% plus 1 share in Ukrnafta, a group of companies associated with the former shareholders of PrivatBank – about 42% of shares.
PJSC Ukrnafta in January-September 2021 reduced oil and condensate production by 1.1% (by 12,200 tonnes) compared to the same period in 2020, to 1.122 million tonnes, including in September production grew by 2.1% compared to September 2020, to 125,500 tonnes.
As the company told Interfax-Ukraine, gas production in the first nine months of 2021 fell by 3.4% (by 29 million cubic meters), to 832.8 million cubic meters, including in September it rose by 4.9%, to 94.6 million cubic meters.
Ukrnafta said that the average daily production has been growing since the beginning of the year, in particular, in September 2021 this figure for oil with condensate amounted to 4,180 tonnes, which is 4.8% more than in January 2021, for gas it was 3.15 million cubic meters, which is 7.3% more than in January 2021.
Ukrnafta is the largest oil company in the country. NJSC Naftogaz Ukrainy owns 50% + 1 share in Ukrnafta, a group of companies associated with the former shareholders of PrivatBank – about 42% of shares.
Ukrnafta has 85 licenses for the production of hydrocarbons, it has 1,809 oil and 153 gas wells on its balance sheet. The company owns 537 filling stations.
