Page 76 - UKRRptMar19

day), which is flat year-on-year.
Ukraine’s largest producer of steel pipes and railcar wheels Interpipe , boosted its sales volume 12% y/y to 857kt in 2018, the company reported in a February 12 press release. Sales of pipe products increased 12% y/y to 668 kt in 2018 due to growth in American (37% y/y to 124 kt), European (24% y/y to 169 kt) and Ukrainian (22% y/y to 179 kt) markets, according to Interpipe. These gains more than offset the loss of the CIS sales volumes (19% y/y to 113 kt). Sales of railway products rose 10% y/y to 189 kt in 2018, driven by the markets of Europe (76% y/y to 41 kt) and Ukraine (39% y/y to 62 kt), the company noted. Again, these gains more than compensated for the loss of CIS sales volumes (17% y/y to 74 kt). Recall on January 19, 2018, the Eurasian Economic Union (EEU) – led by Russia and uniting five former Soviet countries (including Belarus, Kazakhstan, Armenia and Kyrgyzstan) – hiked anti-dumping duties for Interpipe railcar wheels to 34.22% from 4.75%. “Following the introduction of the EEU duties, Interpipe was successful in 2018 in both maintaining decent CIS railway product sales volumes and boosting sales in Europe and Ukraine. The company noted that, having become a leader in the European wheel market for freight railcars, it plans to enter the EU passenger car wheel market and to continue selling wheels in Ukraine. Nevertheless, we think that its CIS sales volumes will continue decreasing,” Dmytro Khoroshun of Concorde Capital said in a note. “We also think that Interpipe’s pipe production might drop about 7% in 2019 because of the expected lower oil prices.”
Pipe production at Ukraine's largest steel pipe producer Interpipe increased by 11.4% month-on-month to 2.14 tonnes per day (or 66.2 tonnes per month) in January, according to calculations of Kyiv-based brokerage Concorde Capital published on February 20. Interpipe NTRP pipe production slid 3.3% m/m to 0.75 tonnes per day in January. Interpipe NMPP output jumped 74% m/m to 0.28 tonnes per day. Interpipe Niko Tube output rose 12.9% m/m to 1.10 tonnes per day. Concorde's Dmytro Khoroshun believes that the 2019 pipe production volume at Interpipe to drop 7% year-on-year to 700 tonnes, or 1.92 tonnes per day.
Ukraine's largest steel pipe producer Interpipe has postponed the deadline for its lenders to join the lockup agreement to February 20 from February 8, according to distressed debt information provider Reorg Research. Interpipe and a coordinating lenders committee signed the agreement on January 11. In comparison with the mid-2018 proposition to the creditors, on which bne IntelliNews r eported in August, Interpipe hiked the coupon rate on the new $310mn six-year bond to 10.25% from 9.35%, the outlet reported last week. Another change is the option for certain bank creditors to convert their debt into either a new loan or the new bond, instead of only into the new bond previously. Interpipe’s restructuring plan has sufficient support to be implemented by way of an English scheme of arrangement or through a consent solicitation, according to a source close to the situation, Reorg Research added. According to earlier reports, Interpipe planned to offer a substantial restructuring fee and Ebitda-linked value-recovery instruments to creditors other than Ukrainian banks. "These restructuring parameters, on which the fair value of the deal depends heavily, remain unknown," Dmytro Khoroshun at Kyiv-based brokerage Concorde Capital wrote in a note on February 15. "In comparison with our August estimate of the NPV to Interpipe’s bondholders, which is 32-35% of par, the 90 bps coupon rate hike increases the value by about 1.3 pp." Interpipe’s bond is currently quoted at 28.7/33.5,
76 UKRAINE Country Report March 2019 www.intellinews.com