News (#07-08 July-August 2017)



Start of energy company privatization

On 24 July the State Property Fund of Ukraine announced start of auctions with the price increase to sell blocks of shares in seven energy companies.

25% stakes in PJSC Odessa-oblenergo shares (initial price UAH 631 million), PJSC Donetskoblenergo (UAH 143 million), PJSC Donbassenergo (UAH 669 million), PJSC Sumyoblenergo (UAH 370 million), PJSC DTEK Dneprooblenergo (UAH 728 million), PJSC DTEK Zapadenergo (UAH 347 million), PJSC Kyivenergo (UAH 759 million) are listed for sale.

Earlier, the SPFU claimed that the state would be able to earn about USD 300 million from the sale of all oblenergo (regional energy supply) institutions.



AMCU closed case against Kyivstar

The Antimonopoly Committee of Ukraine has issued an order that prices for outgoing calls to fixed-line telephone numbers set by mobile operator Kyivstar at the level of UAH/min 1.50, UAH/min 1.60 and UAH/min 1.75 did not cause significant damage to individuals or society, and closed the case without imposing any penalty.

The actions of Kyivstar in the form of setting prices for service of making outgoing calls to numbers of fixed-line subscribers in Ukraine by subscribers of its own network in the amount of UAH/min 1.50, UAH/min 1.60 and UAH/min 1.75 did not cause significant damage to individuals or society for the period of their existence due to subscribers’ possibility to order services “30 minutes to fixed-line numbers”, “10 minutes to fixed-line numbers” and “5 minutes to fixed-line numbers.”

The price of a minute of a call to numbers of fixed-line subscribers using these three packages is UAH/min 0.33, UAH/min 0.50 and UAH/min 0.60, respectively.

A reminder that in July 2016 the AMCU reported that the share held by Kyivstar in the market of services for making outgoing calls to numbers of fixed-line subscribers of Ukraine for subscribers of its own network exceeded 35% and the company could not prove that it experienced significant competition in this market.

Tariffs for the corresponding service of other operators were much lower than Kyivstar’s tariffs, with the latter’s tariffs in the UAH 1.5-1.75 UAH per minute range.

In September 2016 Kyivstar, in response to recommendations made by the AMCU, offered its customers three new packages that included 30, 10 and 5 minutes of calls to fixed-line numbers.


Oil & Gas

Ukrnafta looking for investors for projects in field of gas production, drilling and processing

Ukrnafta has announced the search for participation in five investment projects in the field of gas production, drilling and processing. Ukrnafta plans to receive applications from investors until 30 Septem- ber 2017.

The company’s new development strategy for 2017-2025 assumes investment growth of up to USD 1.7 billion. This amount includes both domestic resources and external investments. The largest oil producing company in Ukraine, accounting for more than 90% of oil reserves and 70% of oil production, plans to double its annual oil production to 21 million barrels or 3 million tons and to increase gas production by 50% to 1.9 billion cubic meters by 2025.

The first three projects offered to potential investors stipulate increase in oil and gas production at the Borislav, Bytkiv-Babchinsk and Rudovsko-Chervonozavodskoye fields and include drilling of new vertical wells and sidetracks, activities for hydraulic fracturing of formation and production stimulation, as well as infrastructure upgrading.

Two other projects are related to investments in drilling services and oil services to meet potential demand on the part of Ukrnafta, Ukrgazdobycha and private companies, as well as re-equipment of one of Ukrnafta’s gas processing plants. This will increase production of liquefied gas and reduce consumption of natural gas, the saved volume of which can then be sold at market prices.



Flixbus expands its business in Ukraine

Flixbus, one of Europe’s largest bus carriers, is launching direct travel from Ukraine. From 27 July night journeys from Kiev, Lviv, Rivne and Zhytomyr will be available to Poland (Krakow, Katowice) and the Czech Republic (Ostrava, Prague, Brno).

Daytime travel will be launched from 10 August. The minimum ticket price is EUR 5.

Starting from last year, Flixbus has been selling tickets from Lviv and Uzhgorod to Amsterdam, Berlin, Vienna, Frankfurt and other cities. However, up till now, direct transportation from Ukraine was carried out by partner company Leo Express.



Swiss bank began opening accounts in bitcoins

The Swiss Falcon Private Bank has entered into a partnership agreement with Bitcoin Suisse, thereby becoming the first traditional bank in the world to provide a full range of services for management of assets in a cryptocurrency.

Falcon Private Bank is a member of Falcon Group financial group, which manages assets amounting to approximately USD 15 billion. It is the first traditional bank to decide to provide services for management of assets in a cryptocurrency, which means opening accounts in bitcoins. Moreover, the bank received the approval of the regulator, the Swiss Financial Market Supervisory Authority.

Following its rise in value, the popularity of bitcoin and other cryptocurrencies is also growing, as is their attractiveness for the banking sector. However, up till now, only specialized exchanges and financial institutions, which are not proper banks, provided buy and sell services for bitcoins. So, in May the American investment fund Fidelity Investments concluded an agreement with bitcoin exchange Coinbase on management of assets in cryptocurrency.

Falcon became the first institution to provide traditional banking services in bitcoins. The bank gives its clients the opportunity to buy and sell cryptocurrency, as well as to open accounts in it. On such account, obviously, interest will be accrued, the amount of which, however, is not disclosed. Finally, a bitcoin ATM has appeared in the lobby of Falcon’s headquarters in Zurich. A person can use it to replenish a bitcoin account by depositing a regular currency, or withdraw real cash from such an account.


Ripple cryptocurrency sees 3000% jump in value

The third largest crypto currency after Bitcoin and Ethereum has risen by 3000%.

Such growth can be explained by extensive plans to create new platforms for selling XRP tokens, as well as by an increase in transaction volume.

In June Ripple jumped to 0.26 cents, which is 4000% growth since the beginning of the year, but in July there was a retracement to 3000%.

Ripple differs from Bitcoin and Ethereum in that most tokens belong to the Ripple network itself, and they cannot be extracted by mining.

Ripple’s current capitalization is USD 7.6 billion, compared with Bitcoin’s USD 44.8 billion and Ethereum’s USD 21 billion.

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