News (#09 September 2019)

Biznews

Banking & Finance

State-run Deposit Guarantee Fund puts up loans pool of 17 banks for sale again

The Deposit Guarantee Fund put up for auction a pool of assets of insolvent banks with a starting price of UAH 409.80 million.

The mega-pool includes assets that were put up for sale as part of 1-1.5 billion pools and were not redeemed. Each asset was traded 2 to 23 times. All loans delinquency exceeds 3 years on average.

The pool was formed according to the calendar approach. It includes the rights of claim and other property rights under loan agreements, which are concluded with business entities and individuals, as well as receivables and real estate, in particular, the building of a sports club, bowling with a bar and fixed assets in the form of equipment with a total area of 2319.6 sq. m., which is located in Kremenchuk.

The pool consists in total of the assets of seventeen insolvent banks.

Business Protection

Number of business appeals to actions by law-enforcement agencies falls

In the second quarter of 2019 the Business Ombudsman Council achieved good financial results. In particular, business managed to save more than UAH 3.5 billion. Throughout the activities of the Council the financial effect for business came to more than UAH 17 billion. Another distinctive feature of the reporting period Ч the number of complaints of illegal actions by law-enforcement agencies fell significantly (by 20%), and the Security Service of Ukraine even Уdropped outФ of the dozen bodies about which the business sector complains. The number of appeals from foreign investors (by 17%) and from large companies (by 20%) has fallen significantly.

УFrom the point of view of efficiency, our complainants have a high level of confidence in us. In the second quarter of the year, 97% of applicants were satisfied with the councilТs actions. State bodies had fulfilled 90% of our recommendations by the end of last quarterФ, Business Ombudsman Algirdas Semeta said announcing the figures.

Mr. Semeta noted that fewer complaints were received against the National Police of Ukraine (by 16%), customs authorities (by 34%), judicial authorities (by 24%), state-controlled enterprises (by 38%), the Security Service of Ukraine (by 50%). At the same time the number of appeals (compared to the previous quarter) regarding the Prosecutor-GeneralТs Office of Ukraine has not changed, the number of applications regarding the actions of tax authorities (by 6%), supervisory authorities (by 13%) and local authorities (by 24%) has increased.

Energy

WOG withdraws from Ukrainian wholesale oil products market

One of the largest filling station chains in Ukraine, which operates under the WOG brand, has withdrawn from the wholesale oil products market.

Oilpoint Consulting Group has analyzed the procurement of oil products in the public sector for the first 7 months of 2019. The market volume for the indicated period exceeded UAH 7 billion, of which UAH 735 million accounted for companies affiliated with WOG, WOG Card and WOG TRADE RESOURCE.

About 90% of all WOG contracts in the public sector are concluded on behalf of WOG Card.

During these 7 months, the largest customers of the filling station chain were Ukrposhta, Security Service of Ukraine, the National Bank, Uktransgaz branches and other government agencies and public utility companies.

At the same time, this year WOG did not participate in major tenders held by the Ministry of Defense and rail operator Ukrzaliznytsia. The WOG filling station chain, which has up to 415 stations, is present in 24 regions of Ukraine.

Regulator reduces Ukrenergo service tariff by half

The National Commission for State Regulation of Energy and Public Utilities has approved a draft resolution on reducing the tariff for Ukrenergo electric power transmission services.

New tariffs will come into effect on 1 October 2019. Ukrenergo will receive UAH 159.3 for 1 megawatt-hour.

Also, in view of the above-mentioned decision, the Regulator decided to approve draft NKREKU resolutions, according to which the tariffs for electric power distribution services for distribution system operators will be adjusted from 1 October 2019.

Investment

Management of Olvia and Kherson seaports to be transferred to private companies

The Cabinet of Ministers has adopted a decision to approve the conditions and start the concession in relation to the seaports of Olvia and Kherson. There have so far been more than twenty applications from major foreign and Ukrainian companies. The decision adopted by the Cabinet of Ministers officially gives the start to the transfer of the management of ports to private investors.

It is assumed that the project in the port of Olvia will attract investment of up to UAH 17.3 billion and increase revenues to budgets of various levels by up to UAH 58 billion for the entire period of the concession agreement, including income of up to UAH 19.5 billion from concession payments.

It is also assumed that the project in the port of Kherson will attract investment of up to UAH 1.37 billion and increase revenues to budgets of various levels by up to UAH 14.3 billion for the entire period of the concession agreement, including income of up to UAH 2.8 billion from concession payments.

Telecommunications

4G to cover all Kyiv Subway System by 2020

All 52 Kyiv metro stations with tunnels between stations and escalators will be covered by 4G by the end of 2020. That is the promise being given by mobile operators and Huawei Ukraine.

Kyivstar stresses that construction will be complete by the end of 2020, provided that the leaders of Kyiv City State Administration and the Subway System will agree quickly on a transparent work permit procedure for operators and the contractor.

According to Lifecell, the construction start after a joint agreement has been signed and access obtained to install equipment.

According to the statements made by mobile operators and the contractor, the first underground stations where 4G will appear in December 2019 will be the final stops of all three metro lines: Akademhorodok, Heroyiv Dnipra and Syrets.

Regulatory

Business people being notified of changes within their companies to fight raiders

Opendatabot has started free notification of all business owners on registration data changes via SMS and email. It is noted that one of the biggest problems that the business sector now faces is illegal takeover. Thus, about 3,500 changes within companies take place every week in Ukraine. Most of them are related to change of director, address, beneficiaries. УThe easiest way to protect your business is to monitor changes within companies,Ф Opendatabot said. It is noted that almost 90% of companies that have undergone certain changes have provided contact details to USR.

State Employment Service to start business inspections again

The Cabinet of Ministers has allowed officers of the State Employment Service to conduct inspections of entrepreneurs.† The draft resolution states that labor inspectors have the right to come with inspections to any production, office and administrative premises of facilities, freely and without prior notice at any time of the day, to review any documents required by labor legislation and containing information about the subject of inspection.

A reminder that in May 2019 the Sixth Administrative Court of Appeal upheld the claim filed by the State Regulatory Service against the Cabinet of Ministers and invalidated Government Decision No. 295, thereby outlawing local inspections by the State Employment Service.

In 2018 officers of the State Employment Service carried out 20,000 inspections and imposed fines to the value of UAH 1.5 billion. It was planned to further increase the performance of inspectors in 2019.

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