Page 46 - UKRRptDec18

Commission (EC) has made a favorable decision on the provision of a first tranche of the fourth macrofinancial assistance of the European Union (EU) to Ukraine in the amount of EUR 500 million and thanked the European Commission for its decision. "Sincerely grateful to the European Commission for positive decision to disburse to Ukraine first tranche of the 4th EU macrofinancial assistance program in the amount of EUR 500 mln," Poroshenko said on its Facebook page on Friday.
6.1.3 Budget dynamics - privatization
Ukraine's Finance Ministry believes that the target of UAH17bn of payments from privatization announced in the national budget for 2019 is realistic , Ukrainian Finance Minister Oksana Markarova has said. At the same time, Markarova recalled that the previously expected revenues of the national budget from privatization were replaced by borrowing. "Every time we borrowed more than we planned to replace this amount, which was not received from privatization," she said.
Five companies officially declared their interest in participating in the privatization of a 78.3% stake in power generation company Centrenergo (CEEN UK) by a November 21 deadline, according to information from the State Securities and Stock Market Commission. They include local company Ukrdoninvest, which belongs to businessman Vitaly Kropachev, who controls Ukraine's biggest private mine and has been identified by local media to have links to Ihor Kononenko, a close associate to President Petro Poroshenko. Local company Balans Grup is controlled by Dmytro Kryuchkov, a businessman who is currently under investigation in Germany and who allegedly has close ties with the Surkis family that controls three power distribution companies in Ukraine. The third is Forbes&Manhattan-Ukraine, a company with Canadian investments led by Mykhailo Spketor, a former top manager of a Ukrainian group controlling eight power distribution companies. The other two companies are non-residents, Georgian International Energy Corporation and Belarusian petrochemical company Neftebitumen Plant. The tender to sell the Centrenergo stake is scheduled for December 13, with the starting price of its 78.3% stake set at UAH6bn. The tender will take place if at least two contenders are present, including at least one foreign bidder. If the tender occurs, we see Kropachev’s company as having the best chance of winning, mainly because it will benefit from clear synergy gained from being Ukraine’s biggest private non-integrated miner of steam coal. Theoretically, due to this synergy, the value of Centrenergo for Kropachev is higher than for the rest of the contenders. The key question, however, is whether Kropachev – or his partners – have enough money. In any case, we still estimate that the probability of a successful tender in December is no more than 50%.
Privatizations of five big state companies are being blocked by court action taken by losers of tenders for consulting work on the sales. On Nov. 28, an appellate court will hear the arguments against the process used by a commission formed by the State Property Fund, the Finance Ministry, and the Economic Development and Trade Ministry. Vitaliy Trubarov, head of the Property Fund, says he hopes “all the groundless accusations will be overturned by the court.” Alexander Paraschiy, analyst for Concorde Capital, winner of several tenders, writes: “Such a blockade might be only the beginning of the sabotage of the privatization process by forces that are controlling large state assets in Ukraine and milking them.”
46 UKRAINE Country Report December 2018 www.intellinews.com