Business news from Ukraine

EBRD COULD PROVIDE UP TO $150 MLN TO UKRZALIZNYTSIA IN OCT TO BUY GONDOLA CARS

KYIV. July 25 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) in October 2017 could provide a loan of up to $150 million to public joint-stock company Ukrzaliznytsia to buy gondola cars.
The bank said that the decision could be made on October 18, while earlier the date for the board meeting to discuss the issue was September 20, 2017.
The total cost of the project is estimated at up to $240.7 million, expected to be cofinanced by the company’s own contribution and grant funding of the technical cooperation assignments and grant financing of goals of technical cooperation.
The project is an integral part of the multi-stage program to upgrade rolling stock of Ukrzaliznytsia. The public joint-stock company seeks to buy around 24,000 gondola cars. The company is looking for bank support to partially finance the initial stage of the program, which envisages the purchase of up to 6,500 gondola cars.
Earlier it was planned that the tender to buy these gondola cars will be launched in Q3 2017.

JOHN DEERE DEALERS IN UKRAINE TO HAVE EXCLUSIVE RIGHT TO SELL VÄDERSTAD PRODUCTS

KYIV. July 25 (Interfax-Ukraine) – The Antimonopoly Committee of Ukraine has permitted John Deere International GmbH (Switzerland) and Vaderstad LLC (Zhashkiv, Cherkasy region) to sign an agreement to sell Väderstad agricultural machinery in Ukraine by Vaderstad LLC only via the independent dealer chain of John Deere International, the press service of the committee has reported.
Väderstad is a family firm founded in 1962. Over the period it has grown from the producer of agricultural tools for local farms into a large international company. The company produces sowing machines and tillers.
Väderstad Ukraine is one of the subsidiaries of the company. The company also has subsidiaries in Britain, France, Germany, Poland, Hungary, Estonia, Lithuania, Latvia and Russia.
Vaderstad LLC was registered in Ukraine in 2006.
John Deere is the global leader in agricultural machinery production. A representative office in Ukraine has been operating since 2008.

SPF ANNOUNCES START OF AUCTIONS TO SELL SHARES IN EIGHT POWER SUPPLY COMPANIES ON EXCHANGES

KYIV. July 25 (Interfax-Ukraine) – The State Property Fund of Ukraine (SPF) has announced the start of auctions to sell shares of eight electricity supply companies and electricity generating companies on exchanges.
“The SPF on July 24 announced the start of auctions to sell shares in eight power companies,” the press service of the fund reported.
According to the document, on August 15, an auction to sell 25% of shares in public joint-stock company Odesaoblenergo on the Ukrainian Exchange will be held (the starting price is UAH 631.3 million).
On August 16, the following auctions will be held: to sell blocking stakes in PJSC Donetskoblenergo on the INNEX stock exchange (the starting price is UAH 143.8 million), PJSC Donbasenergo on the Ukrainian Interbank Currency Exchange (the starting price is UAH 669.2 million), and PJSC Sumyoblenergo on the Perspectiva stock exchange (the starting price is UAH 370.2 million).
On August 17, an auction on the Kyiv International Stock Exchange to sell 25% of shares in PJSC DTEK Dniprooblenergo (the starting price is UAH 728.2 million) and a blocking stake in PJSC DTEK Dniproebergo (the starting price is UAH 728.2 million) will be held.
On August 18, two more auctions will be held: PJSC DTEK Zakhidenergo on the PFTS stock exchange (the starting price is UAH 347.6 million) and PJSC Kyivenergo on the PFTS stock exchange (the starting price is UAH 759.6 million).

GROYSMAN SUPPORTS IDEA OF CREATING FUND TO SUPPORT UKRAINIAN START-UPS ON TERMS OF PUBLIC-PRIVATE PARTNERSHIP

KYIV. July 24 (Interfax-Ukraine) – Prime Minister of Ukraine Volodymyr Groysman has supported the offer of the Ukrainian Venture Capital and Private Equity Association (UVCA) to create a “fund of funds” to support Ukrainian start-ups on the terms of public-private partnership, according to the government online portal.
“Prime Minister of Ukraine Volodymyr Groysman advocates the creation of a large fund to support Ukrainian start-ups, which can be financed from the national budget and by large international investors,” the report reads.
According to its data, participants in a meeting on the premier and the members of the UVCA supervisory council noted that investors are interested in investing in a number of industries in Ukraine, in particular the IT sector, cyber security, dual-purpose technologies, and military technologies. Thus, the establishment of the fund could help optimize seeking and inviting large investors.
“The head of government proposed formulating the concept of the fund’s work and combining its activities with the work of the Innovation Council, which will be approved in the near future,” the report says.
Among the participants in the meeting were the head of the UVCA supervisory board, the founder and managing partner of AVentures Capital, Andriy Kolodiuk, the founder and managing partner of Horizon Capital, Lenna Koszarny, and UVCA Executive Director Olha Afanasyeva.

KERNEL HOLDING AFFIRMED AT ‘B’ AFTER ACQUISITION OF UAI, OUTLOOK STABLE – S&P

KYIV. July 25 (Interfax-Ukraine) – S&P Global Ratings has affirmed its ‘B’ long-term corporate credit rating on Kernel Holding S.A., a Ukraine-based producer and exporter of sunflower oil and grains, the outlook remains stable, reads a report on the rating agency’s website.
“At the same time, we affirmed our ‘B’ issue rating on Kernel’s five-year $500 million eurobond maturing 2022. Our affirmation reflects mainly that, despite Kernel’s acquisition of Ukrainian Agrarian Investments SA (UAI), its credit metrics are still in line with our projections when we assigned the ratings in January. Our previous base case already incorporated an acquisition of that magnitude, which largely explains why there is no impact on the group’s financial ratios. From a business perspective, the UAI acquisition has transformed Kernel into the largest land bank operator in Ukraine, with more than 605,000 hectares. This will help Kernel significantly reduce its dependence on third-party raw materials,” S&P experts stated.
“Because Kernel’s business model is already vertically integrated, we are confident that, by adding these additional 192,000 hectares of high-quality land, the group will create cost synergies that we have not yet incorporated into our model. By strengthening its farming operations, the group should be able to somewhat smoothen the seasonality inherent to its processing operations. Moreover, the increasing number of silos will enable Kernel to expand its logistic territorial network. Despite all the positive aspects that UAI’s integration will bring to Kernel, we have not revised our assessment on the group’s competitive position,” the document reads.
“The acquisition has strengthened the group’s exposure to Ukraine, which we view as having a high-risk corporate environment. Nevertheless, Kernel has a leading market position in sunflower oil processing, which is a large industry in Ukraine thanks to soil and climate conditions, as well as the robust operating performance of the group’s farming division, which should benefit from UAI’s integration. Kernel’s vertically integrated operation continues to support efficiency and decreases, in our view, the volatility of the group’s profitability. UAI enjoys a similar profile in terms of structure of operations, with a modern and productive fleet of machinery and similar cluster organization, allowing fast decision-making. We also view positively that both entities withstood the country’s biggest economic and financial crisis in the past decade,” the agency experts said.

PIVDENMASH EXTENDS CONTRACT FOR SUPPLY OF ENGINES FOR EUROPEAN VEGA CARRIER ROCKET UNTIL 2020

KYIV. July 25 (Interfax-Ukraine) – Pivdenmash (Dnipro) is expanding its participation in the programs of the European Space Agency (ESA), will continue the delivery of serial engines for the fourth stage of the European light carrier rocket Vega.
The company reported on its website “the documents on the continuation of the Vega project in the medium term” have been recently signed.
A source in the Ukrainian rocket and space industry told Interfax-Ukraine the Ukrainian and European sides extended till 2020 the contract for the delivery of engines for the fourth stage of the Vega RD-868P carrier rocket developed by Pivdenne Design Bureau and produced by Pivdenmash.
“The contract with Avio SpA has been prolonged until 2020,” the source said, adding that “the details of the contract were not revealed.”
The Vega carrier rocket was developed by the ESA together with the Italian Space Agency (ASI). It is designed for launching to a solar-synchronous orbit with a height of 1,200 km of satellites weighing up to 1,200 kg or to a polar orbit with a height of 700 km of satellites weighing 1,500 kg.