Business news from Ukraine

MEGABANK ATTRACTS EUR 5 MLN LOAN TO LEND MICRO-, SMALL- AND MEDIUM-SIZED ENTERPRISES

JSC Megabank (Kharkiv) has raised EUR 5 million to lend to micro-, small- and medium-sized enterprises (SME), according to a posting on the bank’s website. “The management of JSC Megabank signed an agreement with a fund managed by Swiss responsAbility Investments AG, an investment asset manager, on the provision of a loan totaling EUR 5 million on December 3,” the bank said.
According to Megabank Board Chairman Oleksiy Yatsenko, the loan term is three years.
Yatsenko added that negotiations with Swiss partners began in May 2019 in the capital of Bosnia and Herzegovina Sarajevo, and before signing the agreement, Megabank successfully passed due diligence.
According to the report, the current agreement with responsAbility Investments AG is already the second for Megabank. In November 2012, two private investment funds led by responsAbility provided the bank with two three-year loans totaling $4 million to support SME.
“We repaid the loan in due time in 2015. This year we decided to deepen our cooperation. We thank to the responsAbility Investments AG team for their trust. It is important for us to get an assessment of a bona fide bank. We are working further without losing momentum,” Yatsenko said.
According to the report, since the beginning of the year, the bank concluded five transactions with international partners for a total of $20 million in equivalent, of which $11 million were for programs supporting micro-, small- and medium-sized enterprises.

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EPICENTER K NEGOTIATING EUR 100 MLN LOAN WITH EIB TO EXPAND AGRICULTURAL EQUIPMENT FLEET

Epicenter K LLC (Kyiv) is negotiating the financing of a project to expand grain storage infrastructure, purchase of agricultural machinery and grain hoppers for the amount of over EUR 100 million with the European Investment Bank (EIB).
“The Epicenter K company is in the negotiation process with the European Investment Bank regarding obtaining a loan of more than EUR 100 million, but the company has not yet made a final decision on obtaining it,” the company said.
As reported, the EIB board of director on November 14, 2019 approved a project to provide financing for the expansion of grain storage infrastructure, the acquisition of new agricultural machinery and equipment, as well as railway cars for grain transportation.
The bank expects that, thanks to the project, 1,100 additional permanent jobs will be created for new operations, 300 workers will be hired for the construction period and 15-20 local subcontracting small and medium-sized enterprises will be involved.
The EIB also indicates that this operation is covered by the political risk guarantee of the European Union for EIB loans outside the EU.
Epicenter K has been developing the agricultural business since 2016. The agricultural division of the Epicenter K group of companies cultivates over 120,000 hectares of land in Vinnytsia, Khmelnytsky, Ternopil, Cherkasy, and Kyiv regions. The group also includes 20 livestock farms and six silos. Epicenter K plans to reach one million tonnes of grain storage capacity.

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EBRD COULD ISSUE LOAN TO UKRAINIAN FEED PRODUCER KORMOTECH

The European Bank for Reconstruction and Development (EBRD) plans to provide Kormotech LLC (Lviv region), a large Ukrainian producer of pet food, with a loan in the amount of EUR 10 million.
According to the EBRD, the loan could be issued to Kormotech for the construction of a pet food plant in Lithuania and the expansion of feed production facilities in Ukraine.
The bank said it would support the first cross-border investment of the Ukrainian company, consisting of the construction of a new production facility in Lithuania.
According to the EBRD, Kormotech is one of the three largest producers of pet food in Ukraine.
The EBRD could approve the decision on the loan on December 11, 2019.
As reported, Kormotech launched the construction of a feed plant in Lithuania in 2018 and plans to launch it in 2019. The planned capacity is 5,000 tonnes of wet feed per year.
Kormotech exports products to over 20 countries, including France, Estonia, the Netherlands, Slovenia, and Poland. The company’s facilities include two plants for the production of dry and wet feed in Lviv region. The company produces goods for cats and dogs under its own brands Optimeal, Club 4 Paws.
The ultimate beneficiaries of Kormotech are Olena and Rostyslav Vovk.

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RAIFFEISEN BANK MAY GRANT EUR 8 MLN LOAN TO LVIV BREWERY

Lviv Brewery LLC, a large supplier of drinks and food products in Western Ukraine, became a guarantor of Pro Tek Vikna Ukraine LLC on a credit line of EUR 8 million from JSC Raiffeisen Bank Aval. According to a company’s report in the information disclosure system of the National Securities and Stock Market Commission, the decision to sign the respective agreement with Raiffeisen Bank Aval was taken on September 20, 2019. The deadline for credit redemption is by December 31, 2026.
The agreement provides for the transfer of a separate launch complex to the bank in mortgage with a total area of 31,790 square meters, land plots with an area of 2,500 hectares and 2,900 hectares (all in Yavorivsky district of Lviv region) of the company Pro Tek Vikna Ukraine.
Lviv Brewery began its activity in 1997 as a wholesale warehouse of food products of all categories, now a large distributor of FMCG in western Ukraine. Main areas of activity: distribution of beer brands Carlsberg, alcoholic beverages Nemiroff, Oreanda, Shabo, grocery products Oleina, Rollton, Runa and others.
Pro Tech Vikna Ukraine is engaged in the production of wooden containers, wholesale of food products, etc.
According to the Unified Register of Legal Entities and Individual Entrepreneurs, the final beneficiaries of both companies are Vasyl Novak, Andriy Panas and Roman Paskovych.

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EBRD AND EIB READY TO PROVIDE EUR 900 MLN LOAN TO UKRAINE FOR ROADS IN 2020

The European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) are ready to provide a targeted loan in the amount of EUR 900 million to Ukraine to develop the road sector, acting Head of the State Automobile Roads Agency of Ukraine (Ukravtodor) Slawomir Nowak has said. “I have already held negotiations with the EBRD and the EIB. A new credit line will be opened for Ukraine in the amount of EUR 900 million,” he said.

According to Nowak, the negotiations were very difficult, but trust in the state and its managers ultimately allowed for a positive solution.

“Within the framework of this new credit line, we will also offer to finance the Weight-in-Motion system at the next stage,” the acting chief of Ukravtodor said.

Nowak also said that he recommended that Minister of Infrastructure Vladyslav Krykliy eararks funds from the Road Fund allocated for road safety to the installation of the Weight-in-Motion (WiM) system.

As reported, Ukravtodor launched in test mode the first two WiM points on the Kyiv-Chop highway.

On September 11, the Rada adopted at second reading a bill allowing automatic recording of violations during weight monitoring on roads.

Weight-in-Motion (WiM) systems will fulfill a function of pre-selection for inspectors of the State Service of Ukraine for Transport Safety until a law allowing automatic weight and weight control on roads is passed.

Ukravtodor previously planned in October to launch the first six WiM points at the entrances to Kyiv. In general, it is planned to install up to 100 WiM points.

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EBRD APPROVES ISSUE OF $120 MLN LOAN TO UKRAINIAN KERNEL

The board of directors of the European Bank for Reconstruction and Development (EBRD) has approved the issuance of up to $120 million to one of the largest Ukrainian agricultural groups, Kernel, on two projects within a syndicated loan to finance working capital.
According to information on the EBRD’s website, the decision was made on September 4.
Within the framework of one project, in particular, Kernel may receive up to $80 million to finance working capital, which is associated with the procurement, storage, transportation and sale of grains for export.
The total project cost is $300 million.
In addition, under another project, the EBRD intends to issue up to $40 million in the form of participation in a syndicated loan to finance Kernel’s working capital, which is related to the purchase, storage, processing, transportation of oilseeds and vegetable oil, as well as sale for export.
The cost of the entire project is estimated at $390 million.
Kernel is the world’s largest producer and exporter of sunflower oil, the leading producer and supplier of agricultural goods from the Black Sea region to the world markets.

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