Business news from Ukraine

ICU INVESTMENT GROUP HIGHLIGHTS EXTERNAL DEMAND ON UKRAINIAN DISTRESSED ASSETS

KYIV. Oct 7 (Interfax-Ukraine) – Foreign investors who buy distressed assets have shown interest in Ukraine. Improved operation of the Deposit Guarantee Fund and judicial system activity on the domestic market of distressed assets should grow, the founder of ICU Investment Group Makar Paseniuk has said.

“Some specialized investors who buy distressed assets and work with risk legislation have shown interest in Ukraine. They are ready to participate in the privatization process,” he said at the Ukrainian Financial Forum in Odesa organized by ICU.

He said that the balance sheet value of assets of insolvent banks passed to the Deposit Guarantee Fund totals some UAH 405 billion.

“It is clear their market value according to the assessments [of the Deposit Guarantee Fund] is around 24% [of the balance sheet value] and, according to assessments of people who are ready to invest, at least five or seven percentage points less. However, this is around $2 billion, which is a large sum for our country,” Paseniuk said.

He said these assets of the fund are the most realistic for sale on the Ukrainian market. Similar opportunities in the private sector are an illusion, and the privatization is not interesting for financial investors.

Commenting on other tools in Ukraine, he said restructuring of foreign commercial debt and macrostabilization yield on domestic liabilities fell from 23% to 17-18% per annum, and for eurobonds reached some 8% per annum, compared to two-digit figures earlier.

He said rates for domestic loan bonds would fall proportionally to the reduction of the refinancing rate by the National Bank of Ukraine (NBU) and liquidity growth.

NUMBER OF TOURISTS TO KHERSON REGION 12-15% UP IN 2016 – OFFICIAL

KHERSON. Oct 7 (Interfax-Ukraine) – Kherson region this season serviced over 3.5 million tourists, according to tentative data presented by Head of Kherson Regional Administration Andriy Hordeyev at Tavrian Horizons ninth international investment forum.

“This season inbound tourist flow grew by 15% and the number of foreign tourists grew by 12%,” he said.

Hordeyev said that next year growth would continue. The official called on investors to invest in tourism.

According to the State Statistics Service, the population of Kherson region as of August 1, 2016 was 1.06 million, while Ukraine’s population (not taking into account temporarily occupied Crimea and Sevastopol) was 42.7 million.

DRAGON CAPITAL FINALIZES ACQUISITION OF EAST AND WEST GATE LOGISTIC WAREHOUSES NEAR KYIV

KYIV. Oct 6 (Interfax-Ukraine) – Dragon Capital Investments Limited (Cyprus), part of Dragon Capital, has finalized deals to acquire stakes in East Gate Logistic LLC (Boryspil) and West Gate Logistic LLC (Stoyanka, both Kyiv region) managing the eponymous logistic complexes near Kyiv.

The company’s press service reported on Thursday that the company acquired East Gate Logistic, a class A complex located in Boryspil, from Akron Investment Central Eastern Europe II B.V., and 60% of West Gate Logistic, a class A facility located in Stoyanka, from GLD Holding GmbH. The deal values were not disclosed.

“Despite high vacancy rates across the Kyiv region’s warehousing market, the level of its saturation with quality class A properties remains low. It is therefore not surprising that both East Gate and West Gate enjoy vacancies of under 8%, while the average rate across the market is 15%… We expect to further increase their occupancy in the near future and keep improving their results,” Volodymyr Tymochko, Managing Director and Head of Private Equity at Dragon Capital, said.

Built in 2007, East Gate Logistic has 49,600 square meters of total space and a leasable area of 49,100 square meters. West Gate Logistic was built in 2008 and has 97,200 square meters of total and 96,300 square meters of leasable area.

UKRAINE NEEDS TO BUILD LAND MARKET STIMULATING ECONOMIC DEVELOPMENT – FINANCE MINISTER

KYIV. Oct 6 (Interfax-Ukraine) – Ukraine needs to build the land market that stimulates the economic development of agriculture, Ukrainian Finance Minister Oleksandr Danyliuk has said.

“First we need to decide what the land market will be. Do you think it does not exist? Of course, it is. It exists, but in the way that limits the development of agriculture in the interests of those who now use it. No one thinks about the interests of people,” he said at a briefing.

The minister said the current situation with the land market in Ukraine is formed only by about “twenty” influential people, although many Ukrainians are owners of land.

According to the minister, the formation of a modern land market will facilitate the creation of new jobs in the agricultural sector.

GOVERNMENT DECISION: UKRENERGO TO RECONSTRUCT FOUR SUBSTATIONS USING EUR 150 MLN RAISED FROM GERMANY

KYIV. Oct 6 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers has passed a resolution on reconstruction of four substations of national energy company Ukrenergo in Kharkiv and Dnipropetrovsk regions with a total cost of EUR 150 million using funds raised from Germany.

The document has been approved at a government meeting on Wednesday.

The substations would be reconstructed under a Ukrainian-German project on construction and development of infrastructure in eastern Ukraine. Its cost is EUR 500 million.

Energy and Coal Industry Minister of Ukraine Ihor Nasalyk said that the sides have agreed the issue. At the end of this week the Finance Ministry will discuss the credit rates with German colleagues.

ANTONOV TO RE-EQUIP UKRAINIAN AN-124-100 RUSLAN, AN-225-MRIYA AIRCRAFT WITH TIRES OF DUNLOP AIRCRAFT TYRES

KYIV. Oct 6 (Interfax-Ukraine) – Antonov State Enterprise (Kyiv) is preparing the re-equipment of Ukrainian An-124-100 Ruslan and An-225-Mriya heavy transport aircraft by tires made by Britain’s Dunlop Aircraft Tyres as part of the program to replace Russian spare parts.

The press service of the enterprise reported that recently An-124-100М-150 aircraft with new tires was tested.

“The test program included flights with 340 tonnes, 360 tonnes and 402 tonnes with various upper alignment indicators. Taking off and landing within the expected conditions of exploitation were made. The tests confirmed a high quality of tires designed by Dunlop Aircraft Tyres Ltd. Specially for Ruslan and Mriya aircraft under the order of Antonov State Enterprise,” the press service said.

The state enterprise said that leading specialists of Dunlop Aircraft Tyres Ltd. took part in the tests, including Director of OE Business Martin Pye.

Antonov President Oleksandr Kotsiuba said that Antonov has been successfully cooperating with Dunlop Aircraft Tyres in the An-148/An-158 regional jet family program and seeks to develop partnership for re-equipment of An-124-100 Ruslan aircraft fleet. He said that the products of the British manufacturer have several advantages: they are certified under EASA requirements and have an acceptable price.