Business news from Ukraine

KERNEL EXTENDS $100 MLN CREDIT LINE FOR ONE YEAR, RECEIVES ADDITIONAL TRANCHE OF $200 MLN

Kernel, a large Ukrainian agricultural group, has entered into an amendment and restatement agreement with a syndicate of European banks and the European Bank for Reconstruction and Development (EBRD) on extending for one year its $100 million pre-export credit facility until June 30, 2022, the group has reported on the website of the Warsaw Stock Exchange (WSE).
According to the report, on September 23, 2019, Kernel signed the amendment and restatement agreement to its pre-export credit facility dated February 2, 2018. Total available limit under amended facility was increased up to $300 million by adding additional tranche of $200 million maturing on June 30, 2021.
Pre-export credit facility will be used by the company to fund the working capital needs of its grain trading and transshipment business in Ukraine.
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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UKRAINE COULD RECEIVE TRANCHE UNDER STAND-BY ARRANGEMENT WITH INTERNATIONAL MONETARY FUND IN JUNE

Ukraine could receive a tranche under the Stand-By Arrangement with the International Monetary Fund (IMF) in June, First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova has reported. “Most likely, in June Ukraine may receive a tranche, because if they the IMF mission come in May, they simply won’t be able technically to provide the tranche in May,” she said in an interview with the LB.ua online portal. According to Rozhkova, the first unexpected and unpleasant surprise for the IMF was the cancellation of the article on illegal enrichment in Ukraine, the second one was the situation with the court rulings on PrivatBank.
“Of course, we’ve informed them about the events and that first we need to get the decisions of courts and only after that we will be able to comment on some legal position, the arguments of the courts … As you know, the IMF makes its decisions at a meeting of the executive board. The mission comes to the board, reports on the trip, on the results of the borrower’s work. What will they say this time: look, they reverse the reform?” she said.

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NEXT EUR 20 MLN TRANCHE FROM EU FOR GOVERNANCE REFORM COULD ARRIVE IN APR-MAY 2019

Minister of the Cabinet of Ministers Oleksandr Saenko expects that the next tranche from the European Union (EU) in the amount of EUR 10-20 million for governance reform could arrive in April or May 2019. “We had a very good political dialog with our European partners. They already have an official position regarding readiness to continue supporting this reform. We expect the next tranche in April-May,” he said in an interview with Interfax-Ukraine.
According to Saenko, the amount of the tranche will depend on the criteria, but according to forecasts, next year Ukraine will receive about EUR 10-20 million for this reform.
“Next year, much will change in the remuneration of civil servants. The remuneration of new reform specialists is a prototype of the remuneration model of civil servants, where the fixed part is at least 70%. This model is laid down in the law on public service. For specialists on reform issues, these parameters have already been established. We have limited the bonuses to 30%. This makes it impossible to establish sky-high bonuses,” the minister added.
Saenko said that now there is still a big imbalance in the system itself, when the position salary is minimal, and total wages and salaries increase significantly due to allowances and bonuses. This, according to the minister, creates dependence on the political biased will of the chief with all the attendant consequences.
“The new system will be more transparent and balanced, and we will gradually transfer the financing of the reform at the expense of the main programs of the ministries’ central offices,” Saenko said.

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NATIONAL BANK OF UKRAINE ASSESSES FIRST TRANCHE UNDER NEW IMF PROGRAM AT $1.5-1.9 BLN

The amount of the first tranche under the new Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) could be $1.5-1.9 billion, First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova has said. “We recently had a monetary briefing where the NBU Governor Yakiv Smolii said that the tranche could be received by the end of this year. As for the sum [of the first tranche], I think that it would be some $1.5-1.9 billion,” she told reporters at the BEPSinUA forum in Kyiv on Thursday.
As reported, the International Monetary Fund (IMF) staff and Ukraine have reached an agreement on economic policies for a new 14-month Stand-By Arrangement (SBA), which will replace the arrangement under the Extended Fund Facility (EFF), approved in March 2015 and set to expire in March 2019.
The agreement is subject to approval by the fund’s management and approval by its board of directors. The board’s meeting is expected to take place at the end of the year after the Verkhovna Rada adopts the national budget for 2019 in accordance with the recommendations of the IMF and the increase in gas and heating tariffs for households, reflecting market trends while maintaining support for low-income consumers.

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NATIONAL BANK EXPECTS FIRST IMF TRANCHE UNDER STAND-BY ARRANGEMENT TO BE PROVIDED THIS YEAR

Governor of the National Bank of Ukraine (NBU) Yakiv Smolii does not rule out that a first tranche under the new Stand-By Arrangement (SBA) from the International Monetary Fund (IMF) could arrive this year. “For the time being we cannot talk about exact deadlines, since the decision will be made by the IMF board. We expect it to take place in December, and we can expect to receive a tranche this year,” he said at a monetary briefing in Kyiv.
As reported, the International Monetary Fund (IMF) staff and Ukraine have reached an agreement on economic policies for a new 14-month Stand-By Arrangement (SBA), which will replace the arrangement under the Extended Fund Facility (EFF), approved in March 2015 and set to expire in March 2019.
The agreement is subject to approval by the fund’s management and approval by its board of directors. The board’s meeting is expected to take place at the end of the year after the Verkhovna Rada adopts the national budget for 2019 in accordance with the recommendations of the IMF and the increase in gas and heating tariffs for households, reflecting market trends while maintaining support for low-income consumers.

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FM CONFIDENT UKRAINE TO RECEIVE FIRST TRANCHE OF EU MACRO-FINANCIAL AID AFTER REACHING AGREEMENT WITH IMF

Ukraine has fulfilled a major part of conditions for receiving the first tranche of macro-financial assistance (MFA) from the European Union in the amount of EUR 500 million, acting Finance Minister of Ukraine Oksana Markarova has said.
“Most of the conditions for the first tranche have already been fulfilled. Some of them are in the process of implementation at the final stage. I think getting the first tranche is realistic enough,” she told Interfax-Ukraine on the sidelines of the 15th YES Conference organized by the Victor Pinchuk Foundation in Kyiv.
“The question is about reaching agreements with the IMF, which are also important for the MFA. We are working on this too, as soon as there is, I hope, a positive solution, then we will be able to [to get the MFA],” Markarova said.
Commenting on the specific conditions for the first tranche of the MFA, she said that the Finance Ministry had already approved seven general tax consultations since July.
“After we approved amendments to the Tax Code that enable the Finance Ministry to render these consultations, we did not actively use this tool. It’s my personal priority,” Markarova said.
She said that some legislative requirements are differently interpreted by tax offices in regions and courts, and the role of these generalized consultations is to provide equal interpretation, therefore, the ministry will use this tool.
Asked about the fulfillment of the requirement to ensure effective verification of information on beneficiaries in the public register, Markarova said that this requirement has already been practically fulfilled, as it is prescribed.
“This is a matter of changing the legal acts. There is already a clear understanding of what needs to be changed in the regulatory framework to make this possible. I think we will fulfill this condition,” the acting minister said, adding that there is no need for legislative amendments.
At the same time, she said that, in general, the verification of beneficiaries is a very complex issue. Markarova said that there is no country that can show how it works, in particular, this is a new experience for European partners of Ukraine.
The acting minister also said that the draft national budget for 2019 announced all the required funds for the work of the High Anti-Corruption Court.

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