- International investors Snap Up $700 million in Ukraine Highway Bonds
- All Concrete Roads Lead to the Black Sea
- Central Bank Keeps Prime Rate Below Inflation
- Ukraine Reaches Out to Central Asia
Ukravtodor, in its debut placement on the Eurobond market, placed $700 million of 7-year bonds at 6.25%, well below the initial return target of 6.625%, Interfax-Ukraine reported. Earlier this year, the Cabinet of Ministers approved sovereign bond guarantees up to $740 million for the state highway agency. The organizers of the issue – J.P. Morgan, Dragon Capital, and Ukreximbank – started calling investors.
Ukravtodor’s yield is comparable to the yield on a 10-year bond obtained by a Ukrainian blue chip company – poultry producers MHP. For comparison, an 8-year, $1.25 billion bond issued by Ukraine six weeks ago – on April 30 – came in at a significantly higher yield – 6.876%.
As part of President Zelenskiy’s ‘Big Construction’ program, Ukravtodor plans to build by 2025, the end of his term, 1,400 km of cement concrete roads on routes leading to Black Sea ports in Odesa, Kherson and Mykolaiv. Designed to take heavy traffic of fully loaded grain trucks, this network of cement roads will triple in size in three years, Andriy Ivko, said Ukravtodor’s road development director (Interfax-Ukraine).
Defying expectations, Ukraine’s central bank decided to keep the nation’s prime rate at 7.5%. After May inflation came in at 9.5% yoy – the second highest in Europe after Turkey’s – most economists interviewed by Bloomberg expected a hike. At two previous meetings – in March and April – the Board of the National Bank of Ukraine hiked the rate. The next meeting is July 22.
Timothy Ash writes from London: “Inflation is at 9.5% and policy rates only at 7.5%, that is a big negative rate differential…There is a sense also that the Zelensky administration is pulling away from IMF conditionality, so maybe the changes in NBU management made over the past year are finally coming home to roost with a pro growth agenda being rolled out.”
Inflation will slow down this fall and hit the central bank’s target of 5% in first half of next year, Kyrylo Shevchenko, the bank’s governor, predicted. He said: “Inflation will start to slow down in the autumn of this year and will return to the target of 5% in the first half of 2022.”
Factors bringing down inflation are expected to be: a growing agricultural sector, a strong hryvnia, and a fading base of comparison with last year’s recession. Ukraine’s currency has gained 5.3% against the dollar this year, making it one of the world’s top performers. Looking at future economic performance, Shevchenko said: “The key risk is still the spread of the COVID-19 pandemic.”
Last month’s end run around the Naftogaz Supervisory Board to install a new CEO “makes it very difficult for us to continue to support the company,” EBRD President Odile Renaud-Basso told Bloomberg in Warsaw. Under the headline, “Shock CEO Ouster Pushes Ukrainian Gas Giant’s Backer to Brink,” Bloomberg writes: “The EBRD, along with the World Bank, is a key international backer of Naftogaz, helping to give one of Ukraine’s largest companies more financial heft as well as bond-market credibility.”
Over the last two years, Naftogaz has sold a total of $1.55 billion of Eurobonds. On April 30, Ukraine’s Cabinet of Ministers suspended the Naftogaz Supervisory Board and installed Yuriy Vitrenko as CEO. “We were very unhappy and we made that very clear,” Renaud-Basso said. “We hope it’s a one-off, and not a sign of really backtracking in [corporate governance].”
Prime Minister Shmyhal filed a lawsuit with the Kyiv District Administrative Court to cancel the order issued to him by the National Agency for the Prevention of Corruption to cancel the appoint of Yuriy Vitrenko as Naftogaz CEO. Shmyhal has said the issued should be resolved by the end of this week. The Court says it is reviewing the request.
With doubts clouding future deliveries of Russian gas across Ukraine, Azerbaijan could become a source of imported gas for Ukraine, says Andriy Prokofiev, head of customer service for Ukraine’s Transmission System Operator. Azeri gas could cross Turkey, then come north to Ukraine through Bulgaria and Romania on the Trans-Balkan pipeline. “The GTS Ukraine operator continues to cooperate with partners from Romania and Moldova on the development of natural gas transportation along the Trans-Balkan route in order to increase import capacity,” he said after a meeting of a Ukrainian-Azerbaijani working group on energy cooperation.
Ukraine is working with Turkmenistan and Uzbekistan to become the fulcrum of a Europe-Central Asia transit route, Foreign Minister Dmytro Kuleba said after meeting with Central Asian diplomats. Ukraine’s Black Sea ports would be the entry points to Europe and Turkmenbashi port would be the entry to Central Asia. At the same time, Yuriy Vitrenko, Naftogaz CEO, is lobbying the US and the EU to force Gazprom to allow Central Asian gas to flow through Ukraine to the EU.
Raiffeisen Bank Aval changed its name to Raiffeisen Bank, the largely Austrian-owned bank said. “The name of the bank should be simpler, like everything for our clients,” said Board Chairman Oleksandr Pysaruk. In connection with the renaming, the bank said there is no need to contact branches, reissue cards or reissue documents. Founded in 1992, the bank is primarily owned by Vienna’s Raiffeisen Bank International with 68.27% of shares, and the EBRD, with 30%. Ukraine’s largest foreign-owned bank, Raiffeisen has $4.4 billion in assets, 393 branches, 1,800 ATMs, and 2.6 million customers.
During the first five months of this year, UIA issued $20 million dollars in refunds to passengers, stemming from 68,000 requests due to flights cancelled because of coronavirus restrictions, the airline reports. Noting that UIA has repaid $41 million since the pandemic started in Europe, UIA said its “communication departments are doing everything possible to process every request as soon as possible.”
For road trippers, Ukravtodor is restoring this summer 46 km of roads leading to the Shatskyi Lakes, reports Yuriy Poguliaiko, head of Volyn Regional Administration. Located in Ukraine’s northwestern corner, these freshwater lakes are famous for their pure, clean, waters.
- Privatization: Sales of Large Scale State Corporations Starts
- Ukrposhta Expands Postal Banking
- Dutch and South Korean Companies Build Plants
- UZ Moves to Sell Half of Train Tickets Through Smartphones
Privatization receipts will increase fourfold this, reaching $450 million, said Kyrylo Tymoshenko, the Deputy Chief of Presidential staff, predicted at a government forum “Ukraine 30. Economy Without Oligarchs.” Starting prices for three big government corporation sales are: United Mining and Chemical Company, the titanium producer: $138 million; Kyiv’s Bolshevik plant: $50 million; and Kyiv’s President Hotel: $12 million.
With ‘large scale privatizations’ only unblocked last month, the sales schedule for this year is as follows: United Mining and Chemical Company in August; Azov Shipyard in September; Bolshevik site in October; Hotel President in November, and by December two small Black Sea ports – Belgorod-Dnister and Ust-Dunaisk.
Next year, Centrenergo, the conglomerate of 23 regional power producers, will go on sale in March 2022. Odesa Port Plant, the chemical producer, is to go on sale in April 2022.
The Defense Ministry is transferring three hotels to the State Property Fund for privatization, Tymoshenko said. They are: the Kozatsky on Kyiv’s Maidan, the Vlasta in Lviv and the Bratislava in Kryvy Rih.
“There are hundreds of such non-core facilities in various government agencies, ministries,” Tymoshenko said. He cited a ski area in Lviv region and a health complex in Vorzel, Kyiv region, which are owned by the State Fiscal Service. He vowed: “Such non-core facilities will be transferred to State Property Fund to be privatized.”
The Bolshevik site, located on Peremoha Avenue with adjacent parks and the Shuliavska Red line metro station, could attract an estimated $500 million in residential and office construction, according to Serhiy Tsivkach, the Executive Director of UkraineInvest.
Since last fall, the sale of distilleries has netted the government $55 million. The Property Fund aims to sell 900 state properties this year, most of them are considered ‘small’ or under $10 million in value. To generate more grass roots support, the Rada is considering a bill to channel 10% of proceeds of auctions to local communities, said Dmitry Sennychenko, Director of the Property Fund.
Nova Poshta has opened three more regional terminals, each capable of processing 120 parcels a minute. With each facility estimated to cost $1.5 million, terminals have opened in Chernivtsi, Slavyansk and Vinnytsia. A total of 209 jobs were created. Earlier this year, the privately owned delivery company opened similar centers in Cherkasy and Mykolaiv and doubled its center in Kyiv. Last year, Nova Poshta’s profit rose 27% for $36 million.
Ukrposhta will have installed 7,500 point of sale terminals by the end of next month, said the state postal company. This will make Ukrposhta the fifth largest user of POS terminals in Ukraine. In addition to bringing cashless payments to small towns in Ukraine, the POS terminals allow cardholders to withdraw up to UAH 15,000 ($554) in cash from their postal banking accounts.
Ukraine’s cyber police announced that they arrested six hackers behind a major ransom ware gang that had targeted international institutions, including four US universities, reports NBC News. In raids on 21 homes in the Kyiv region, police arrested seized computers, luxury cars and $185,000 in cash. The American targets of the Cl0p gang included: Stanford University, University of Colorado, University of Maryland and University of Miami.
The Naftogaz Supervisory Board may meet to discuss the move by its chair, Clare Spottiswoode, to remove Yuriy Vitrenko as CEO, Bloomberg has reported. However if the three government members of the 6-member Board boycott the meeting, the dismissal would be blocked, wrote Concorde Capital. The Cabinet is opposed to the dismissal and Justice Minister Denys Malyuska says he plans fight the June 15 suspension order by the National Agency on Corruption Prevention.
Dutch company Bontrup plans to invest €50 million in ‘green’ energy project in the Chornobyl exclusion zone, the Economy Ministry has report. Over the investment cycle the project could grow to €1.5 billion, providing jobs for 10,000 workers, the Ministry said. With projects in 25 countries, Amsterdam-based Bontrup says of its mission: “We innovate with nature to create new opportunities for sustainable infrastructures, offshore developments, logistics and agricultural production.”
South Korea’s Caris plans to build a $60 million plant in Stryi, Lviv region to manufacture highway guardrails from plastic waste, reports the Economy Ministry. The factory would employ 900 workers and would benefit from the Zelenskiy Administration’s ‘Big Construction’ which includes a major highway safety component. Yu Cheol, the principal investor, reviewed the investment in a meeting in Kyiv with Stryi Mayor Oleg Kanivets and Deputy Economy Minister Iryna Novikova.
Ukravtodor is halfway through rebuilding and repaving the longest road in Ukraine – the M-30 which stretches 1,392 km from Stryi, Lviv region to Izvarino, Donetsk. Almost twice as long as the drive from Paris to Marseille, the new M-30 east-west route will unite two existing international roads – the M-12 Stryi-Ternopil-Kropyvnytskyi-Znamenka and M-04 Znamenka-Luhansk-Izvarino. The final 100 km of the M-04 are not in government-controlled territory and will not be renovated.
With 73% of Ukrzaliznytsia rail tickets now sold online, UZ plans to launch a cellphone mobile app by the end of this year, said Alexander Pertsovsky, Director of the state railroad’s passenger division. Within a year, Ukrainians could buy half of all tickets through smartphones, the railroad operator has predicted.
This week, Motor Sich Airlines plans to sign a deal with Ukroboronprom for the completion of construction and leasing of two An-140 regional turboprops, reported Interfax-Ukraine. Once completed at the Kharkiv aviation plant, the 52-seat planes would become the backbone of an expanded domestic route network for Motor Sich. Ukreximbank is financing the project.
- Legal Challenge to Vitrenko as Nafto CEO
- Privatization Prepared for State Behemoths
- Train Stations to Become Shopping Centers
- Cooling Inflation: No Drought This Summer
- Ukrainians Love Bitcoin
Legal warfare broke out over Yuriy Vitrenko, the new head of Naftogaz, Ukraine’s largest oil and gas company and the nation’s largest taxpayer. The National Agency on Corruption Prevention said the Cabinet violated conflict of interest laws by moving Vitrenko on April 28 from his post as acting Energy Minister to CEO of the state energy company. Clare Spottiswoode, Chair of the Naftogaz Supervisory Board, called on Vitrenko to step down for 10 days until the legal wrangle is resolved.
Vitrenko accused the anti-corruption body of “selective justice,” saying that Ukraine’s Cabinet controls Naftogaz, not the Energy Ministry. In a Naftogaz press release, he said that as acting Energy Minister for four months this year, he did not have the right to vote in Cabinet meetings. Vitrenko cited the case of Yevhen Kravtsov, who as shifted in 2017 from First Deputy Infrastructure Minister to CEO of Ukrzaliznytsia. The Infrastructure Ministry has direct control over the state railroad.
Justice Minister Denys Malyuska promised to challenge the decision in court. Prime Minister Shmyhal set a 10-day deadline to resolve the impasse. Last week, Vitrenko was in Washington, meeting with congressional representatives and journalists to campaign against the Russia-Germany bypass gas line, which is 95% complete.
President Zelenskiy said that two large state companies – power producer Centrenergo and chemicals producer Odesa Port Plant – will be auctioned online auction in the coming months. “Centrenergo is completely ready,” he told reporters, speaking of a company that has 23 power plants across the country. Centrenergo has an installed capacity of 7,690 MW – equivalent to half the capacity of all renewable power producers in Ukraine.
Returning to the rhetoric of two years ago, Zelenskiy said: “My will is that the state should get rid of everything as much as possible. I agree with the position of the Europeans and the United States that the state is not the coolest manager.” Next in line, he said, are two Kyiv hotels – the Presidential and the Ukraine. He said: “Now I really want the President Hotel to be privatized.”
Japanese and Australian companies dominate among 13 foreign companies planning to bid this summer for the United Mining and Chemical Company. The starting price is $140 million for the company, Europe’s largest producer of titanium. Writing in Focus, financial journalist Kirill Sazanov compares this privatization to the sale of Krivorozhstal to ArcelorMittal back in 2005. He writes the titanium miner “is also the largest enterprise in its profile in Europe, which makes it of serious interest to foreign investors.”
This summer, Ukrzaliznytsia plans to lease out 41,000 square meters of commercial space in the nation’s 24 busiest passenger stations, Ivan Yuryk, acting CEO of the state railroad, told reporters at a government development forum. These leases could bring in $4 million a year to the money-losing railroad. At the end of the summer, UZ will start renting out space at the system’s remaining 84 passenger stations. Listing possible tenants who could bid through ProZorro Sale, Yuryk said: “Food courts, pharmacies, shops, recreation areas, shops that sell big brands, brand stores of large chains and manufacturers, bank branches, flower shops.”
In a second step, the nation’s 11 busiest stations are being prepared for long-term lease under concession contracts with strategic investors. Already six foreign and domestic investors have shown interest in the concessions, scheduled to start in 2023. “What do we see at the exit?” asked Yuryk. “Citizens and guests of our country, arriving at the station, can eat in famous brands of food courts, drink fragrant drinks in cafes, buy souvenirs, visit branded stores of large chains and manufacturers, use the services of banks, please loved ones with fresh flowers from stores, and have fun in the areas for children.”
The Finance Ministry raised almost $300 million – in hryvnia and euros – in its weekly bond auction, the Ministry reports on Facebook. With yields little changed, sales totaled slightly less than half the amount sold last week. For hryvnia bonds, yields ranged from 10.97% for 1-year bonds, to 12.59% for 5-year bonds. The sale of 1-year euro denominated bonds yielded €60.8 million at 2.5%.
Attracted by high interest rates, international investors increased their investment in Ukrainian government bonds by $377 million this month, prompting the central bank to buy $415 million. Despite the purchases, Ukraine’s currency strengthened to less than 27 to the dollar for the first time in almost a year.
Helping to cut food inflation, no area in Ukraine is threatened by drought this summer, Tetyana Adamenko, head of the agro weather department of Ukraine’s Hydrometeorological Center, told Interfax-Ukraine. “The situation is very good, the soil is an excellent source of moisture,” she said, citing a key factor for crops. “There are almost no areas threatened by drought, which is unusual for Ukraine in the last decade.”
Ukrainians received about $400 million in profit from bitcoin investments, ranking 10th highest in the world, according to the Digital Transformation Ministry, citing a study by Chainanalysis. The top three were: US – $4.1 billion; China – $1.1 billion; and Japan – $900 million. Six months ago, the Rada approved on first reading a bill, ‘On Virtual Assets,’ which would provide legislative regulation of a market for crypto-assets. Oleksandr Bornyakov, deputy minister of Digital Transformation, said: “Citizens and crypto companies will be able to officially work and receive income from operations with new assets. The incomes of the participants of the innovation market will provide the state budget with additional receipts.”
Svetofor, a fast-growing Russian discount supermarket chain, plans to open 40 stores in Ukraine in the second half of this year, Artem Khomenko, Ukraine director for Mere, the Svetofor brand, told reporters. The first store is to open this week in Mykolaiv. To cut costs, the Mere places its products on pallets, rather then shelves. It claims to spend an average of $18,000 to open each store, 1% the amount spent by ATB, Ukraine’s largest supermarket chain. Alexei Danilov, secretary of Ukraine’s National Security and Defense Council, vowed to block the Russian chain, asking reporters: “The emergence of a Russian discount here, how is it even possible?”
UIA is closing its offices in Beijing and Moscow in cost-cutting moves. Last fall, UIA closed its offices in Austria, Belarus, Germany, Italy, Spain, Switzerland, Turkmenistan, and Uzbekistan.
- Will Central Asian Gas Fill Ukraine’s Pipe?
- Foreigners Snap Up Ukraine Bonds Hryvnia Appreciated 5%
- This Year UZ Cuts Managers, Adds Trains to Airport
Ukraine is preparing to take legal action against Gazprom to unblock natural gas supplies from Central Asia, announced Yuriy Vitrenko, the new Naftogaz CEO (FT). “We are talking about tens of billions of cubic meters…Central Asian gas alone can fill the whole Ukrainian gas transit system,” Vitrenko said. For the last 15 years, Russia has blocked gas from Kazakhstan, Turkmenistan and Uzbekistan from flowing to the EU. As a result, these nations encouraged China to build a gas pipeline east. Since 2009, the Central Asia–China Gas Pipeline moves gas 7,000 km, from Turkmenistan to Shanghai.
If Russia continues to block transit gas, Vitrenko said he would appeal to EU competition authorities and take Gazprom to international arbitration. In 2018, the Stockholm Arbitration Tribunal ruled in favor of Naftogaz in a dispute with Gazprom, awarding Ukraine’s oil and gas company $4.6 billion. Vitrenko led the Naftogaz legal team that won the dispute.
To upgrade gas links with Poland, work is underway on modernizing the final stretch of an 80 km pipeline from the Polish border to the Komarno compressor station in Lviv region, reports Serhiy Makogon, Director General of Ukraine’s Gas Transmission System Operator. Although work is to be completed by this time next year, the cross border pipeline links will be inadequate for Ukraine to meet its goal of receiving from Poland 6.6 billion cubic meters – slightly more than half of Ukraine’s total annual imports. Referring to Poland’s Baltic liquefied natural gas landing terminal on the Baltic, Makogon said: “”We are actively working on creating alternative gas supply routes to Ukraine, and Poland is a key direction for us, given the existing LNG terminal in Świnoujście.”
International investors have spent more than $315 million buying Ukraine’s government bonds last week, the largest amount in almost two years. ICU writes of last week’s auction: “It appears that foreigners purchased more than half of last week’s issuance in local currency.” Foreigners now hold over UAH 100 billion in T-bills and appear to be on track to match the February 2020 peak.
Foreign purchases contributed to the hryvnia appreciating 1% against the dollar last week and 5.2% so far this year. To hold the line at 27 hryvnia to the dollar, the National Bank of Ukraine bought $375 million in dollars last week. ICU writes: “This week, we expect foreigners to invest more funds in local-currency debt, causing the hryvnia to appreciate further toward UAH26.5/US$.”
Kinstellar is acquiring DLA Piper’s Ukraine practice. With 60 lawyers, including 10 partners, Kinstellar is now among the largest law firms in Ukraine. Kinstellar reports: “The merger strengthens our key practice areas, including corporate/M&A, banking & finance, employment & benefits, litigation and real estate, and expands our coverage with new practice areas, including tax and intellectual property.” The new management committee is comprised of: Daniel Bilak, Senior Counsel, and Co-Managing Partners Margarita Karpenko, formerly managing partner of DLA Piper Ukraine, and Olena Kuchynska, managing partner of Kinstellar’s pre-merger Kyiv office.
Ukrzaliznytsia plans to let go 30% of management staff in Kyiv, about 800 positions, by the end of this year, announced Acting CEO Ivan Yuryk Implementing a long-planned managerial restructuring he said the goal is “to eliminate duplication of positions and clearly distribute the functionality between departments.” Ukraine’s largest employer, with 250,000 workers, the state railroad moves 82% of the nation’s freight and about half of passengers. For freight tonnage, UZ ranks fourth in Eurasia, after the railways of China, Russia and India.
Italy’s Ferrovie Dello Stato Italiane SPA is working with UZ to prepare by the end of this year a feasibility study for high speed trains in Ukraine, UZ acting CEO Ivan Yuryk has announced. Construction of a high-speed network linking Lviv, Kyiv, Dnipro, Odesa and Kharkiv would cost as estimated $15 million and would be completed by 2030. Italy fastest train, the Frecciarossa, or Red Arrow, runs from Turin in the north to Salerno in the south, often traveling at 300 kph.
With the Boryspil Airport Express train achieving 71% occupancies in June, Ukrzaliznytsia is increasing the trains to 22 a day. There are now hourly departures between 5:30 am and 9:30 pm. The 40-minute ride includes stops at: Darnytsia, the suburban rail station, and Vydubychi, the transit hub with a Green line Metro stop and a terminal for buses to the south. Due to traffic jams on the Dnipro bridges, the express train increasingly is seen as a reliable way to get from right bank Kyiv to Boryspil, Ukraine’s busiest airport.
Mykolaiv Locomotive Repair Plant has signed a contract to modernize 55 German-made locomotives for the Egyptian National Railways, the Ukrainian company writes on Facebook. The repairs at the ADtranz locomotives will be carried about in Ukraine and in Egypt. Serhiy Roi, the plant director, said: “The partnership is planned for a long-term, since the number of locomotives in the future can be increased to 200 units.”
As of last week, Israel allows its citizens to travel to Ukraine, due to Ukraine’s low Covid infection rate. Before the pandemic, Israel was UIA’s top foreign travel destination.
The planned opening of Ireland’s embassy in Kyiv this summer was welcomed by Ihor Zhovkva, deputy chief of staff of President Zelenskiy, in a Zoom call with Helen Blake, assistant secretary for International and European Affairs at the Irish Prime Minister’s office. Zhovkva said: “The opening of the Irish diplomatic mission is a long-awaited event that should help unlock the significant potential for bilateral cooperation between Ukraine and Ireland.”
- Lviv Prison to Become IT Campus
- Ukreximbank Sells Historic Buildings in Kyiv
- UZ Sells Bears
- Hryvnia Strengthens, Central Bank Buys Dollars
- China-Ukraine Trade Jumps by One Third
- Russia Pinches the Gas Hose
- Merkel, then Zelenskiy To Visit the White House Late Next Month
SoftServe, the IT company based in Lviv and Austin, Texas, will build a high tech ‘campus’ on an extensive 13-hectare site of a former prison in a southern part of Lviv city. SoftServe, a global outsourcing giant with 9,000 employees, outbid six other companies last week, paying $14 million – almost triple the starting auction price.
Oleg Denys, co-founder of SoftServe said of the former prison site: “The idea is to create a neighborhood where you can collect talents and have all the conditions for the development of these talents in the city, have futuristic offices, educational institutions.”
Lviv Mayor Andriy Sadovyy enthused: “SoftServe is one of the coolest companies in the IT market today in Ukraine…There will be a school, a kindergarten, sports infrastructure, and there will be workplaces.”
The successful online auction of Lviv Correctional Colony № 48 is to be the first privatization of 35 shuttered prisons put up for sale in a program started this year. Two prison sales – one in Odesa and one in Irpin, a northern suburb of Kyiv – failed due to a lack of bidders. Justice Minister Denys Mayluska hopes the Lviv sale will generate investor interest. A separate piece of the Lviv prison colony was sold last week for $1.1 million – almost nine times the starting price. Under the program, 30% of sales proceeds go to the state budget and 70% toward rebuilding existing prisons.
Ukreximbank, the nation’s third largest bank, is putting up for electronic auction 16 real estate properties put up for collateral a decade ago, before the financial crisis of 2014-2016. At the June 29 auction on SETAM trading system, properties for sale range from a building facing Kyiv’s historic Sofiyiska Square to a one-room apartment in Uzhgorod. Of the 16, six are in Kyiv, including three “architectural monuments,” says Yevhenia Bozhko, managing partner of the National Electronic Stock Exchange.
Ukrzaliznytsia is selling two bears to a Dutch zoo as part of a program started last month to sell ‘non-core’ assets. The bears were housed at the Zaporizhia Children’s Railway. They are being transferred to the Ouwehands zoo in Rhenen, Utrecht. The zoo recently reopened its renovated ‘Bear Forest’. “I knew for sure that in the process of selling non-core assets there would be…but I definitely did not expect bears,” Ivan Yuryk, Acting CEO of the state railroad, writes on Facebook. Beyond bears, UZ has identified 182 non-core assets for sale through ProZorro.Sale.
The Deposit Guarantee Fund has completely liquidated 51 of the 97 banks declared insolvent during the 2014-2016 banking crisis, Svitlana Rekrut, Managing Director of the Fund, tells the Kyiv Post. However, assets frozen for a decade have depreciated sharply, presenting obstacles for the Fund to repay its $4.3 billion debt to the state. The Fund’s goal is to triple by 2023 the size of insured deposits, to $21,800. The EU standard is $122,000.
The Deposit Guarantee Fund raised a record $37 million last month in sales of liquidated banks, the Fund reports. Sales included: the 12-story Victoria hotel in Odesa, for $5.1 million; and a central Kyiv office space, for $3.1 million. Reflecting pricing problems and legal clouds over properties, 92% of the 581 auctions did not take place for a lack of bidders.
With the hryvnia flirting with strengthening above 27 to the dollar, the central bank intervened last week, buying $375 million in foreign exchange. This was almost 10 times the amount bought by the National Bank of Ukraine in the first week of June. On the supply side, high commodity prices – notably iron and grain – are flooding Ukraine with dollars. On the demand side, Covid controls are preventing many Ukrainians from expensive EU vacations this summer, forcing travelers to settle for cheaper package tours to Egypt and Turkey.
China-Ukraine trade during the first quarter grew by one third yoy, to $4.2 billion, the Economy Ministry press office reported after Ministry officials met with China’s ambassador to Ukraine, Fan Xianrong. Trade Representative Taras Kachka said: “The Chinese side is interested in increasing supplies of Ukrainian soybeans, peas, barley, wheat, poultry and other products.” Ukraine’s State Consumer Service has said it is working to increase the export to China of Ukrainian chicken, flour, fish, eggs, apples, blueberries, and cherries.
Chinese involvement in building the first $1.1 billion segment of the Kyiv Bypass Road, the Ministry said, would be facilitated by the signing of an intergovernmental agreement on infrastructure construction cooperation. Other priorities for the Ministry are: construction of the 90 km Poltava-Oleksandriya road and increasing China-Ukraine freight traffic. At the G7 Summit in England, one American official talked of spending “several trillion dollars” on infrastructure projects designed to provide alternatives to China’s Belt and Road.
The Pentagon announced a new package of $150 million in military assistance for Ukraine that will include counter-artillery radar, electronic warfare equipment and counter-drone technology, Reuters reports. The latest tranche of assistance will come in addition to the $125 million that the Pentagon announced on March 1, which included armed Mark VI patrol boats.
Russia is holding back on gas supplies to Europe this summer to create higher prices in winter, Lada Zerkal, Energy Minister advisor, charged in an interview on Ukraine 24 TV. “Russia is artificially holding back the European market and is not supplying the volumes that Europe needs now, for example, to fill empty gas storage facilities,” Zerkal, a former Naftogaz official, said. “It was a cold spring. Now we need to fill everything, and gas prices are very high.”
Ukraine’s east-west gas pipeline system is operating at less than 20% of its design capacity, Volodomyr Gnoevoy, head transit for YE Energia, said at the Ukrainian Gas Open Forum. Designed to carry 400 billion cubic meters, the system now carries 30 bcm for domestic consumption and 40 bcm for transit. If Russia stops sending gas across Ukraine at the end of the 2024 contract, “all this financial burden will fall on the shoulders of domestic consumers,” he said.
President Biden has invited German Chancellor Angela Merkel to Washington on July 15 to personally negotiate a solution to Russia-Germany Nord Stream 2 gas line, Germany’s Handelsblatt business newspaper reports. To compensate for the loss of Russian gas transit fees, German and American officials have talked about Germany creating a hydrogen production industry in Ukraine.
President Biden will meet with President Zelenskiy in Washington in late July, Foreign Minister Dmytro Kuleba said on Ukraina 24 TV. “This will be an official full-fledged visit, which envisages not only the meeting with President Biden, but also many other events,” he said. “We are very carefully preparing this visit.”
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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