Business news from Ukraine

UKRAINE REPAYS $350 MLN LOAN TO DEUTSCHE BANK AHEAD OF SCHEDULE

Earlier this week, Ukraine repaid early a short-term loan from Deutsche Bank AG London in the amount of about $350 million, attracted at the end of last year, a source in the market has told Interfax-Ukraine.
According to the source, taking into account interest, the payment reached some $354 million.
Interfax-Ukraine could not immediately reach the Ministry of Finance for confirmation of the information.
As reported, according to government resolution No. 1291 dated December 23, 2020, this is a bridge loan taken for up to six months at a rate of up to three-month LIBOR + 5.75%, which can be repaid ahead of schedule in the event of a change in the market price of Ukraine’s eurobonds or new issue on the terms determined by the loan agreement.
Early 2021, the Ministry of Finance said that in the last days of 2020 it attracted a short-term $340.7 million loan from Deutsche Bank. According to the ministry’s statistics, in December 2020, Ukraine’s debt to this creditor increased by $372.6 million, to $1.313 billion, and by the end of February 2021 it decreased to $1.272 billion.

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UKRAINE APPROVES RAISING OF $200 MLN LOAN FROM IBRD TO IMPROVE HIGHER EDUCATION

The Cabinet of Ministers approved raising of a $200 million loan from the International Bank for Reconstruction and Development (IBRD) to improve the higher education system in Ukraine.
“The government adopted an order of the Cabinet of Ministers of Ukraine on attracting a loan from the International Bank for Reconstruction and Development for the implementation of the project Improving Higher Education for Results in the amount of $200 million,” the press service of the Ministry of Education and Science said.
It is noted that the purpose of the investment project is to create conditions for increasing the efficiency, quality and transparency of higher education in Ukraine, and to support systemic reforms in the social sphere.
The project consists of four interconnected components, and its implementation will take place over five years.
In particular, the first component involves improving approaches to management, financing, quality and transparency in higher education, namely: creating incentives for the implementation of structural reforms, in particular, through the introduction of digital solutions.
The second component involves the formation of partner alliances of higher education institutions to improve efficiency and quality.
The third component provides for the development of ability and improvement of the educational environment. It is planned to finance the procurement of computer and multimedia equipment and software for the organization of distance learning and teaching, modern telecommunications, the development of modern digital infrastructure, the development and launch of electronic learning management systems, and the purchase of laboratory equipment for modern educational and research laboratories.
“The project also includes the implementation of certain educational policies. We are talking about the development of financial autonomy of higher educational institutions, the expansion of the implementation of the formula approach to financing, and the improvement of universities,” the ministry said.

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STATE AGENCY UKRAVTODOR TO BUILD NEW ROAD IN ZAKARPATTIA REGION UNDER HUNGARIAN LOAN

The State Agency of Automobile Roads of Ukraine (Ukravtodor) intends to implement three priority projects in Zakarpattia region under a Hungarian loan, the allocation of which was confirmed by Minister of Foreign Economy and Foreign Affairs of Hungary Peter Szijjarto during his working visit to Ukraine on Wednesday.
As the press service of Ukravtodor told Interfax-Ukraine, among these facilities, in particular, is the construction of a new 10-kilometer road of the first technical category from the Hungarian border to the M-24 highway, and then to the highway M-06 Kyiv-Chop.
“This will be a continuation of the Hungarian M3 motorway from Budapest to Vásárosnamény, which, in turn, is part of the Fifth Pan-European Transport Corridor that passes through the territory of Ukraine,” the agency said.
The expected traffic intensity on the site is 12,000 vehicles. The construction of three interchanges is envisaged. Another checkpoint on the Hungarian-Ukrainian border is envisaged as well.
According to Ukravtodor, the designed-estimated documentation for this project is being examined. The estimated cost of construction is UAH 3.8 billion.
Another priority object is the construction of a bypass road around the town of Berehove and further to the Luzhanka checkpoint on the border with Hungary. The estimated cost of construction is UAH 1.5 billion. The designed-estimated documentation is at the final stage.
In addition, the modernization of the bridge across the river Tysa at the checkpoint Tysa-Záhony is a priority.
According to Ukravtodor, the start of the implementation of these projects is scheduled for 2021.
In general, in 2020, some 282 km of roads were repaired under the Big Construction program in Zakarpattia region.
As reported, Minister of Foreign Economy and Foreign Affairs of Hungary Peter Szijjarto confirmed the allocation of EU50 million to Ukraine for the development of road infrastructure in Zakarpattia region.

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INTERPIPE ATTRACTS EUR 37 MLN LOAN

The international vertically integrated pipe and wheel company Interpipe concluded an agreement with JSB Ukrgasbank to sign a general loan agreement for the amount of EUR 37 million.
According to a company’s press release, the general agreement provides for a EUR 30 million amortized loan for five years and a revolving credit line for EUR 7 million for three years.
Interpipe Chief Financial Officer Denys Morozov said that Interpipe has raised its first loan after completing the debt restructuring in October 2019.
“It has been obtained as part of the implementation of the Company’s strategic goals and allows reducing the interest burden for the Company. We are especially pleased that the financing for the Ukrainian industrial company has been secured at the Ukrainian state bank Ukrgasbank that is known as Ecobank and has been financing a wide range of environmental and green projects. We intend expanding our cooperation with the bank in other areas as well,” Morozov said in a press release.
As reported, Interpipe announced the decision to carry out the next partial redemption (buyout) of eurobonds 2024, this time in the amount of $74.82 million. The redemption is scheduled to be carried out by December 29 this year.

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METINVEST TO GET LOAN FROM BLACK SEA TRADE AND DEVELOPMENT BANK

The Black Sea Trade and Development Bank (BSTDB) and the vertically integrated group of mining and metallurgical companies Metinvest have announced the signing of a loan agreement in the amount of EUR 62 million to finance and refinance the purchase of machinery and equipment for its iron ore enterprises (GOK).
“The seven-year credit facility was granted with a two-year grace period for principal repayment,” the group said in a press release.
“This news marks the culmination of significant efforts since July and is an important milestone in our history, as the facility is our first from an international financial institution. At Metinvest, we share the values of BSTDB and intend to use this financing to make our business more efficient, as well as to increase our overall contribution towards the Black Sea region’s economic wellbeing,” Yuriy Ryzhenkov, the Chief Executive Officer of Metinvest, said.
“Working with an international financial institution has been a highly positive new experience for Metinvest. I would like to express my gratitude to the BSTDB team for their continued support throughout the process and for helping to make this transaction happen. We are proud of this new partnership and are eager to develop it further,” Alexander Lyubarev, the Director of Corporate Finance and Treasury at Metinvest, reported.
“We are happy to assist Metinvest, a leading manufacturer and employer in Ukraine, in implementing its development and capital expenditure program focused on improved production technology, efficiency and environmental impact. Given the importance of this sector to the country and its export potential, this operation will have an important developmental impact in Ukraine. As a regional development bank, we welcome that the group plans to buy new equipment from and export its products to other BSTDB member countries, thus strengthening the regional cooperation,” BSTDB President Dmitry Pankin noted.

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UKRAINE PLANS TO ATTRACT $170 MLN LOAN FROM WORLD BANK

By the end of 2020, Ukraine plans to attract a $170 million loan from the World Bank out of the $300 million provided, the Finance Ministry said on Monday.
“Today, on December 14, Ukraine and the International Bank for Reconstruction and Development signed an agreement on the second additional financing in response to the COVID-19 pandemic for the Social Safety Nets Modernization Project,” the Ministry of Finance said in a message on the website.
“The main goal is social assistance and social services for low-income families, as well as assistance to those affected by the adverse economic impact of the pandemic,” the press service said, quoting Minister Serhiy Marchenko.
As the Ministry of Finance recalled, this is the second additional financing of the specified project, the total amount of the loan for it should be $750 million.

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