Page 82 - UKRRptSept19

preliminary estimates; and (c) a 0.0041 share of a so-called performance security. The nominal value of the new notes and the number of performance securities issued for the benefit of holders of the existing notes will be $82.1mn and 821, respectively, so that holders of $1,000 of new notes will receive a 0.01 share of a performance security. The new notes will bear 10.25% interest and will mature on Dec. 31, 2024, with $150mn to be redeemed on Dec. 31, 2023.
● Ferrexport
Ferrexpo CEO possibly under scrutiny for embezzlement. Kostyantyn Zhevago, the CEO and majority owner of Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO LN), is possibly being reviewed by the State Bureau of Investigations (SBI) in relation to the embezzlement of about $113mn from the Finance & Credit (F&C) Bank, according to media reports that cited an August 5 Facebook post by Olha Varchenko, the SBI’s deputy director. Varchenko wrote that a member of parliament (MP) is being checked for their possible relation to a scheme that allowed an offshore company to take loans from certain foreign banks in 2007-2014 using F&C Bank’s $113mn in correspondent accounts as collateral. That collateral was seized by the foreign banks in the autumn of 2015, immediately after F&C Bank was declared insolvent, because the offshore company defaulted, according to Varchenko. The MP being investigated is Zhevago, the former controlling owner of F&C Bank, according to the rbc.ua news site, which cited unspecified media sources. Recall, Zhevago lost the parliamentary elections in July and will lose his political immunity once the new parliamentary convocation begins, which is likely in September.
Ukraine’s largest iron ore pellet exporter Ferrexpo produced 812 kt of pellets in July, which amounts to 26.2 kt per day, a 12.7% m/m decrease, according to our analysis of data reported by Interfax-Ukraine on August 19. In 7M19, Ferrexpo’s pellet output amounted to 6.17 mmt (29.1 kt per day), a 2.6% y/y increase.
● DTEK
DTEK Energy coal mining falls 0.9% in 1H19. Ukraine’s leading coal and power producer DTEK Energy (DTEKUA) mined 11.32mmt of raw coal in 1H19, or 0.9% less y/y, according to Concorde Capital calculations based on sector-wide data provided by Energy Ministry. Its output was 5.9% less than the plan agreed with the ministry. In June alone, DTEK Energy produced 1.88mmt of coal, which is 3.6% more y/y and 4.4% more compared to May, on a daily average basis.
DTEK coal mining falls 10% in July, importing hard coal Ukraine’s leading coal and power holding DTEK Energy (DTEKUA) produced 1.75 mmt of ROM hard steam coal in July (9.6% less y/y), Concorde Capital calculated based on sector-wide data provided by Interfax-Ukraine. July output was 56.5 kt on an average daily basis, which is 9.9% less from June and the holding's weakest mining result for the last three years. In 7M19, DTEK Energy mined 13.08 mmt of ROM hard steam coal (on average, 61.7 kt per day), or 2.2% less y/y.
82 UKRAINE Country Report September 2019 www.intellinews.com