Page 73 - UKRRptSept19

September 2019 and $50mn in March 2020).
Also, the agency expects the company will be able to generate enough cash to repay a Sberbank loan of UAH6.4bn (or about $240mn) maturing in July 2020. S&P also highlighted that existing unrestructured debt for $153mn does not affect the company’s solvency as this debt won’t trigger cross-default on the rest of the debt.
S&P expects Ukrainian Railways will achieve 2019-2020 operating results at least in line with the level of 2018 (when EBITDA amounted to UAH16.2bn) and its CapEx in these years won’t exceed UAH13bn.
The credit agency could downgrade Ukrainian Railways’ rating in case its liquidity worsens (e.g. if existing credit lines become unavailable, or if the firm increases its expenditures) or if S&P concludes the company won’t be able to accumulate enough liquidity to smoothly repay its Sberbank loan next year. The only possible short-term trigger for the company’s rating increase is an upgrade of Ukraine’s sovereign rating, S&P wrote.
Flush with $500mn raised two weeks ago in Eurobonds, Ukrainian Railways is stepping up talks with three foreign manufacturers to buy 200 new electric locomotives by 2025. Contenders are France’s Alstom, China’s CRRC and Canada’s Bombardier, Anton Sabolevsky, director of strategic development, tells Magistral, the state company’s inhouse publication. The three companies already make locomotives sized to run on Ukraine’s Soviet-era 1520 mm track gauge.
Ukraine’s discount air champion is the start-up, SkyUp, which plans to carry 2.8mn passengers this year. Through June, SkyUp carried 668,500 passengers – 27% on scheduled flights, the rest on charter flights. The most popular destinations for regular flights were: Barcelona, Tbilisi, Batumi, Alicante, and Larnaca. The most popular charters were to Sharm el-Sheikh, Hurghada, Marsa Alam (Egypt), Antalya, and Monastir (Tunisia).
Kyiv Boryspil airport was Europe’s second-fastest-growing airport in the first half of this year for the mid-size category of 10-25mn passengers a year. Boryspil passenger traffic jumped 20% compared to the first half of 2018, second only to Berlin-Tegel’s 25% jump, according to Airports Council International Europe, an industry group. Growth accelerated in July, with Boryspil recording a 26% y/y jump, or 1.6mn passengers.
Ukrzaliznytsia (Ukrainian Railway) will order up to 40 new diesel locomotives from General Electric (GE US), the company’s CEO Yevhen Kravtsov told unian.ua news agency on August 12. He says that the new batch of locomotives could be ordered in late 2019 or early 2020, depending on GE’s order backlog. The purchase is part of the company’s $36bn planned modernisation programme and was made possible after it issued a $500mn Eurobond in July to high demand. Ukrzaliznytsia earlier signed a memorandum for board cooperation on diesel locomotives with GE, as well as ordered a first batch of 30 locomotives that were supplied to Ukraine in late 2018 and early 2019. On top of that, Ukrainian Railways is in active negotiations with France's Alstom (ALO FP) and China's CRRC on potential orders of new electric locomotives that will be financed in the countries of the producers’ origin. Answering a question on Ukrainian Railways’ plans to attract an international investor to the company, Kravtsov said that he supports the idea of its partial privatization via IPO or the placement of shares among some
73 UKRAINE Country Report September 2019 www.intellinews.com