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The Business Week Week 7 26 February 2018 The Business Week Week 7 Ukraine will ‘aggressively’ privatize and make ‘seismic changes’ in corporate governance www.ukraineinvest.com Ukraine will ‘aggressively’ privatize and twice the inflation rate of 13.7%, Maksym make ‘seismic changes’ in corporate Martyniuk, first deputy minister of Agrarian governance of state companies this year, Policy and Food reports. The cost of Prime Minister Groysman promised in an leasing state land went up 24%. The opinion essay in Tuesday’s Wall Street most expensive land was in Cherkasy Journal. Addressing foreign investors, and Poltava, where it cost about $100 a he writes: “To catch up with the leading hectare a year. The cheapest land was in The Business countries in our region, we need to Zakarpattia, a hilly, rocky region where a Week is written grow twice as fast as the average—at field can be rented for $29 a hectare. In and produced by James Brooke, least 5% to 7% per year…Ukraine has Mykolaiv and Kherson, southern regions Editor in Chief attractive investment opportunities with light rainfall, rents were also low – of the Ukraine in many industries such as agri-food, about $31 a hectare. Business Journal for and on behalf manufacturing, energy, transport and new Ukraine produced 6.5% more sugar than of UkraineInvest technologies.” one year ago, Ukrtsukor, the producers association, reported Tuesday at the end Agriculture of the nearly six month refining season. Ukraine Business Journal Working with sugar beets, 46 refineries Drones monitor about 10% of Ukraine’s produced 2.1 million tons of sugar. Three farmland, DroneUA co-founder Valery regions produced half the nation’s sugar: Yakovenko estimated recently at Vinnytsia, Khmelnytsky and Ternopil. The AgriTech in Ukraine and the World. top importers of Ukraine’s sugar last year At the conference, Oleg Bakhmatyuk, were: Sri Lanka, Turkey, Azerbaijan, Sudan owner of Ukrlandfarming, told Interfax and Libya. that he is experimenting with drones on his agroholding’s land bank of 570,000 Orbis Asset Management of San hectares. He said drone prices should go Francisco intends to invest $30 million down, from $1,000 today, to $300 by 2023. in Imperia-Agro, a KryvyiRih manufacturer When that happens, he said, drones will and distributor of seeds, plant protection become common in farming. agents, and mineral fertilizers. YuryOtsbrik, founder and CEO of Imperia-Agro, said: Ukraine was the fourth largest source “We intend to create a national leader in of imported food for the EU last year, lending and financial services for the small according to the European Commission. and medium-sized farmer in Ukraine.» The ranking was Brazil (EUR 11.8 billion), From the US, Orbis CEO Vincent Ordonnyu the USA (EUR 11.0 billion), Argentina (EUR said: «We believe that Ukraine today is the 5.7 billion), and Ukraine (EUR 4.7 billion) most attractive market for investment in The average cost of leasing private the agricultural sector.” farmland rose 25% last year, almost 7 / 2 Crop receipts, a pre-harvest financial Horizon reports: “As a result of this instrument allowing farmers to use future successful public launch, Horizon Capital, harvests as collateral, will inject up to on behalf of its fund EEGF II, has sold a $520 million in credit into Ukraine’s small- 40.9% stake in Purcari, realizing a 3.2 times scale farm sector through 2020, predicts gross cash-on-cash return on the sale the World Bank’s International Finance of these shares.” Horizon retains 22.7% Corporation. A pilot project for one tenth stake in the winery, which has operations in that amount used 200 crop receipts as Moldova and Romania. collateral in eight regions in 2016 and 2017. Privat Bank plans to increase lending to IFC has worked with Ukraine’s government small businesses this year by two thirds to develop necessary legislation and to over last year, to $178 million, the bank create a registry to track crop receipts says in a press release. With more and easily and transparently. Switzerland’s www.ukraineinvest.com more Ukrainians opening small businesses, State Secretariat for Economic Affairs the bank, Ukraine’s largest, says that it provides financial support for the project. added 76,000 new small business clients Jason Pellmar, IFC’s Ukraine head, says: last year. “Our aim is to encourage more private investment to unlock [agricultural] After an IMF team spent last week here, potential, expanding access to finance for Resident Representative GoestaLjungman smaller farmers and fostering innovation in released a statement Monday: “It is the farming sector.” now important that the authorities move expeditiously with parliamentary Banking & Finance consideration of the draft law on the anticorruption court, while ensuring OPIC has signed a deal to insure $250 that the necessary amendments are million in fixed-rate bond securities adopted during the parliamentary issued in US capital markets for a major process to make the approved law fully Ukraine project. Because of this insurance, consistent with program commitments Moodys rates the bonds Aa2, well above and the recommendations of the Venice the government of Ukraine’s Caa2 rating. Commission of the Council of Europe.” The money raised will go to building a Timothy Ash writes: “I sense this anti- Central Spent Fuel Storage Facility at corruption legislation is the deal breaker the Chernobyl site. This storage facility for the IMF, and also for the Poroshenko will ultimately save Ukraine “hundreds of Administration…It looks like the IMF millions of dollars” now spent on storage program will remain off track for some in Russia, says Energoatom, Ukraine’s time, and the Minister of Finance will nuclear power plant operator. Following have to decide whether it tries to come to Overseas Private Investment Corporation market before then, to get some cash in guidelines, the project will generate $225 the bank.” million of procurement of US-made goods and services. Holtec International of New Horizon Capital plans to invest $100 to Jersey, will supply storage casks, other 200 million in Ukraine over the next five equipment and training to the project over years, Lenna Koszarny, founding partner five years. and CEO of the private equity and venture capital firm, told the weekly Biznes. Horizon Horizon Capital, the Kyiv-based private Capital manages four private equity funds, equity firm, has guided one of its with more than $700 million invested in investments, Purcari Wineries PLC of Ukraine and Moldova. Moldova, through an IPO on the Bucharest Stock Exchange. Investors oversubscribed Prime Minister Groysman promised an the offering more than four times over. international conference Tuesday that his 7 / 3 government will keep working with the weapons to NATO standard. In September, IMF, Ukrinform reports. He said: «We will Defense Minister StepanPoltorak continue to cooperate with the IMF. We will talked with Canadian Defense Minister support macrofinancial stability, attract Harjit Sajjan about Canada building an investment and increase exports.» ammunition plant in Ukraine. Ukraine’s state railway may seek to raise The number of registered unemployed as much as $1 billion on international people dropped by 50,000 in January, to debt markets this year to refinance its loan 378,900, according to the State Statistics portfolio and replace aging rolling stock Service. Officially, the unemployment and rail lines, the company’s acting chief rate is 1.4% and there are 1 million job executive officer YevhenKravtsov tells vacancies. With signs in the Kyiv metro Bloomberg. Ukrzaliznytsya plans to more offering Ecolines bus tickets to Poland for than double capital investments this year, $15, many unemployed people now travel buying new locomotives and wagons for to the EU for temporary jobs. cargo and grain hoppers to replace older Exports to Europe grew by 21%, machinery. outstripping Ukraine’s global export Danish Foreign Minister Anders increase of 16%, Prime Minister Groysman Samuelsen announced in Kyiv on reports. In a sharp turn around from earlier Wednesday €65 million in aid to Ukraine dependence on Russia, EU countries under the Danish Neighborhood Program. bought 40.5% of Ukraine’s exports last Funding projects in human rights, year, or $20 billion. democracy and sustainable economic The White House squarely blames Russia growth, the Program is reserved for two for last summer’s “Not Petya” cyber countries, Ukraine and Georgia. On June attack on businesses. The short statement 27, Copenhagen will host the second reads: “In June 2017, the Russian military international conference on reforms in launched the most destructive and costly Ukraine. The first was held last year in cyber-attack in history. The attack, dubbed London. “NotPetya,” quickly spread worldwide, Last year, nearly $1 billion worth foreign causing billions of dollars in damage aid projects were implemented or agreed across Europe, Asia, and the Americas. It upon in Ukraine, reports the Economic was part of the Kremlin’s ongoing effort to Development and Trade Ministry. Of destabilize Ukraine and demonstrates ever the 453 foreign aid projects that were more clearly Russia’s involvement in the implemented, the largest donors were the ongoing conflict. This was also a reckless US -- $370 million -- and the EU -- $310 and indiscriminate cyber-attack that will be million. met with international consequences.” Business President Poroshenko is expected sign a new law on limited liability companies Colt Canada, the main supplier of small that designed to modernize and streamline arms to Canadian Forces, is chasing a procedures for half a million companies, deal that could see Ukraine order up to or about 43% of all business entities in 100,000 rifles, The Ottawa Citizen reports. Ukraine. The new law allows for debt to In December, Canada’s government equity conversion, the practice of corporate changed Canada’s arms export rules to deals, the use of corporate liability rights allow the sale of automatic weapons and as collateral for loans, and introduces other small arms to Ukraine.
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