Canadian company Black Iron, which is implementing the investment project to create a new iron ore production facility in Kryvy Rih (Dnipropetrovsk region), has announced its decision to accelerate the expiry date of the common share purchase warrants dated March 29, 2019 and April 5, 2019.
The company said in its press release on July 30 that the warrants were issued in connection with a private placement of units, with each share purchase warrant being exercisable into one additional common share of the company at a price of $0.09 per share until March 29, 2022 and April 5, 2022, as applicable.
“The Warrants are subject to the right of the Company to accelerate the expiry date of the Warrants if the Company’s common shares close at or above $0.15 per share for more than 10 consecutive trading days on the Toronto Stock Exchange (the “Acceleration Event”). The Company is entitled to accelerate the expiry of the Warrants to that date that is 30 business days from the date of issuance of a news release announcing the exercise of the acceleration right,” it said.
Black Iron also noted that the press release constitutes notice to the holders of warrants that the Acceleration Event has occurred and the company has elected to accelerate the expiry date of the Warrants. This notice only affects the warrants dated March 29, 2019 and April 5, 2019 and not any other warrants the company has issued.
In addition, it is reported that Black Iron’s management have recently initiated discussions with institutional investors on a royalty that could contribute materially to the funding required for project construction and are receiving strong interest.
“Negotiation of a Heads of Agreement on the commercial terms to be included in a binding contract for a high potential $60 million investment in exchange for being awarded the construction contract for the Shymanivske project have concluded positively with one company and are well advanced with a second. Further details on this will be disclosed in due course noting that a binding contract would only be entered into with only one of these two companies, should the parties reach an agreement, who will then lead the future planned construction of the project,” the company said.
State-controlled Ukreximbank (Kyiv) as a financial partner of the Big Construction project has provided 68 bank guarantees over the past three months to ensure tender offers and guarantees for fulfilling contractual obligations of road construction enterprises, the bank’s press service has said.
“We have simplified a lot of procedures for road workers, reduced the time for making decisions. And as a result, today the bank with a whole range of financial instruments in the equivalent of hundreds of millions of hryvnias ensures the timely execution of work of all companies involved in the construction and reconstruction of roads of state and local significance,” a member of the board of Ukreximbank, the curator of the corporate business, Oleksandr Ihnatenko, said.
According to the report, in July, with financial support from Ukreximbank, repair and construction work is carried out at more than 200 facilities in Ukraine. It is specified that next sections of updated roads with a length of over 740 km will soon be commissioned.
Ukreximbank was established in 1992, the state is the sole owner.
According to the National Bank of Ukraine, as of July 1, 2020, Ukreximbank ranked third (UAH 220.708 billion) among 75 banks operating in Ukraine.
The net loss of Ukreximbank (Kyiv) amounted to UAH 2.07 billion in January-March 2020, while for the same period in 2019 the bank declared UAH 395.32 million in profit, the bank said in the quarterly financial statements released on its website.
According to the statements, the bank’s net interest income amounted to UAH 325.99 million for the first quarter, which is 9.7% more than for the first quarter of 2019, while the net profit from investments in securities increased by 40.6 times, to UAH 2.44 billion.
The bank lost UAH 4.3 billion on differences in rates, while it earned UAH 407.74 million in the same period in 2019.
The bank’s assets increased by 6.9%, to UAH 150 billion, including loans to customers by 7.9%, to UAH 57.5 billion for the reporting period.
The bank’s liabilities increased by 10.8%, to UAH 145.58 billion, including customer deposits by 12.2%, to UAH 86.54 billion.
The bank’s net worth halved to UAH 4.5 billion. Ukreximbank’s charter capital remained at the level of UAH 38.73 billion.
According to the National Bank of Ukraine, as of January 1, 2020 Ukreximbank ranked third among 75 banks operating in the country in terms of total assets (UAH 202.92 billion).
Ukreximbank, the sole owner of which is the state, was created in 1992.
The net profit of Ukreximbank (Kyiv) in 2019 amounted to UAH 63.62 million, which is 13.4 times less than in 2018 (UAH 852.30 million), according to the bank’s report on the website.
According to the report, in the fourth quarter of 2019, the net loss of Ukreximbank amounted to UAH 2.21 billion, while in 2018 the bank declared a profit of UAH 146.06 million for this period.
One of the reasons for the decrease in profit in 2019 was a decrease in the bank’s interest income by 7%, to UAH 1.77 billion, which is associated with a decrease in the loan portfolio by 3%, to UAH 7.24 billion and the securities portfolio by 14%, to UAH 3.57 billion.
In terms of non-interest income, there was an increase in net commission income by 4%, to UAH 652.24 million. This partially offset the decrease in other incomes by almost 2 times, to UAH 105.09 million, due to a lack of one-time and irregular receipts.
In addition, the loss in the fourth quarter of last year and the decrease in profit in general for 2019 are explained by an increase in expected credit losses to UAH 3.039 billion from UAH 1.14 billion for three quarters, while in 2018 the bank, on the contrary, received an additional UAH 1.64 billion.
The bank’s assets in 2019 decreased by 13.2%, to UAH 140.34 billion, in particular loans to customers by 26.5%, to UAH 53.28 billion.
The bank’s liabilities decreased by 14.2%, to UAH 131.43 billion, in particular, debt to customers by 6.1%, to UAH 77.13 billion.
Ukreximbank’s net worth for 2019 rose by 5.5%, to UAH 8.90 billion.
The charter capital of the bank remained at the level of UAH 38.73 billion.
JSC Ukreximbank and the State Agency of Automobile Roads of Ukraine (Ukravtodor) with the participation of President of Ukraine Volodymyr Zelensky have signed an agreement to provide the first tranche for updating roads in Ukraine in the amount of UAH 5.782 billion from the amount of financing, which will total UAH 19.3 billion.
“Despite the quarantine measures in our country, the most important thing is that the state works and, together with the banking sector and construction companies, builds kilometers of roads and “sews” our country! As I said, roads, bridges are a priority,” Zelensky said after the signing of the agreement.
He emphasized that the Big Construction program is the image of Ukraine as a country with modern and high-quality roads on which you can travel. The president also noted that the program will contribute to the creation of new jobs.
The president’s press service notes that the attraction of funds from Ukreximbank under state guarantees by Ukravtodor became possible due to the adoption of laws on amendments to the budget that Zelensky signed on February 4, 2020, and thanks to the decision of the National Bank to lower the refinancing rate. The loan interest rate will be 10.5% per annum.
“We, as a state bank, support the Big Construction project. With the signing of the agreement, Ukravtodor will receive the first tranche in the amount of UAH 5.782 billion at a rate of 10.5% per annum, which is 2% lower than the Cabinet of Ministers foresaw,” chairman of the board of Ukreximbank Yevhen Metsger said.
He said that Ukreximbank is ready to become a financial partner of the Big Construction project and lend its shoulder to all companies, in particular contractors, that will be involved in the construction of the facilities under this program.
State-owned Ukreximbank (Kyiv) is considering a scenario to repurchase its eurobonds from the market with their replacement with cheaper and longer-term resources, chairman of the financial institution Yevhen Metsger has said.
“As one of the working scenarios, the repurchase of our eurobonds from the market is considered, the rate at which is about 10% in dollars, and replacing them with cheaper and longer-term resources from the International Monetary Fund, he said.
In addition, Metsger said that the bank is holding a dialogue on additional capitalization with the Finance Ministry as a representative of the owner and with the National Bank of Ukraine (NBU).
“Formally, the management will first discuss the situation and forecast of activities with the supervisory board, then ask it to apply for additional capitalization to the government. For the entire cycle, we assume that it will take us time until the end of the second quarter,” he said.
The chairman of the board of Ukreximbank said that the bank needs additional capital to enable it to develop.
He said that without additional capital, the bank will also not be able to provide the necessary support during a pandemic to a number of clients and key sectors of the economy.
“To rely on itself, make a profit, then invest it in net worth is a long way to go, given that the bank’s financial results for 2019 do not allow to reinvest profits in capital. Our former management declared over UAH 600 million of income. However, in reality, I am afraid that we will get a much more modest figure,” the banker said.
According to him, the bank now has quite negative dynamics in operating income, resulting in, there is no way to quickly accumulate financial results to cover one-time effects, and it will take time for the new management team to reproduce the working business model and reverse the trend.