Ukraine: fresh cash, but not from IMF

Roman Olearchyk

Roman Olearchyk has in his four years with the Financial Times covered Ukraine, Georgia and Moldova.

Ukraine: fresh cash, but not from IMF

Apr 10, 2013 11:04am by Roman Olearchyk

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Ukraine’s cash-strapped government failed to reach agreement on Wednesday with a visiting IMF mission on a $15bn bailout, according to local officials. Having realised that a deal was unlikely, Kiev moved on Tuesday to patch up short-term financing needs. Ukraine raised $1.25bn through a fresh 10-year eurobond at 7.5 per cent on Tuesday, helped by international investors’ hunt for yield.

And so, Kiev has bought itself more time, though at borrowing rates much more expensive than the IMF has offered. It’s a strategy Ukraine has stuck to in recent years, but one that may not be possible if market confidence shrinks and the country’s economy continues to deteriorate. Continue reading »

Tags: Ukraine economy, Ukraine-IMF Posted in Europe, Ukraine | Permalink

Ukraine: Cyprus ripples not negligible

Mar 29, 2013 5:29pm by Roman Olearchyk

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News headlines about a Cyprus-crisis contagion have so far focused largely on Slovenia, Malta, Italy and Spain.

But Ukraine could also take a hit. While Ukrainian businesses are said to have possibly just $1-3bn in Cyprus – much less than the $30bn that has been estimated for Russia – if this money gets confiscated by the bailout levy or tied up by financial transaction limitations, it could be enough to tip the country’s troubled economy deeper into crisis. Continue reading »

Tags: Cyprus, Ukraine economy Posted in Europe, Ukraine | Permalink

Ukraine: replacing Russian gas with cheaper European imports

Mar 28, 2013 10:38pm by Roman Olearchyk

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Long the main transit route for Russian natural gas exports to Europe – and a big consumer of Gazprom fuel itself – Ukraine is now starting to use its vast gas transit pipeline network in reverse mode. It is importing less expensive gas from Europe to the West, and at prices lower than its “brotherly” Slavic neighbour charges. Continue reading »

Tags: Gazprom, oil & gas, Russia-Ukraine Posted in Europe, Russia, Ukraine | Permalink

Ukraine: record snows hit economic recovery hopes

Mar 27, 2013 12:46pm by Roman Olearchyk

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It’s not a pretty picture on the ground in Kiev.

The Ukrainian capital is still crawling out from under a record weekend snowfall that has muddied streets, paralysed traffic and upset basic services including rubbish collection.

It will do nothing to prevent the economy falling into recession in the first quarter of 2013, after GDP growth of 0.2 per cent in 2012. But it does increase the urgency for Kiev to find external economic support, if not from Russia, then from the International Monetary Fund, which had a delegation arrive in town on Wednesday. Continue reading »

Tags: IMF, Ukraine economy Posted in Ukraine | Permalink

Why Cyprus ripples are hitting Russia harder than Ukraine

Mar 18, 2013 4:52pm by Roman Olearchyk

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Like Russian ones, many Ukrainian companies do business through offshore special purpose vehicles or holding companies registered in Cyprus. By some estimates, billions of dollars with Ukrainian roots flow through Cyprus into offshore tax havens each year. And large portions of this – some $17bn since independence in 1991 – have made their way back into Ukraine through the Cyprus conduit, which is, in fact, the largest contributor of foreign direct investment in the Ukrainian economy.

But this does not mean that most Ukrainian companies exploiting the Cyprus tax loophole actually stash their cash there. And if they don’t, exposure will be limited, analysts say. Continue reading »

Tags: banking, Cyprus, eurozone crisis, Russia-Cyprus Posted in Cyprus, Europe, Russia, Ukraine | Permalink

Ukraine’s backward-looking car tax

Mar 15, 2013 6:31pm by Roman Olearchyk

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In slapping fresh import duties on car imports, Kiev may achieve its short-term goal of partially reducing Ukraine’s trade deficit while simultaneously providing a boost to slumping domestic car output.

But the protectionist move — announced on Thursday by a cash-strapped government in talks with the IMF on a $15bn bailout — could carry costlier long-term consequences. It may infuriate fellow WTO member countries already shocked by Ukraine’s plans announced in September to renegotiate 371 tariffs just five years after becoming a member of the international trade organization. Continue reading »

Tags: regulation, trade, Ukraine economy, Ukraine politics, vehicles Posted in Europe, Ukraine | Permalink

Ukraine: profit from chicken and eggs

Mar 5, 2013 3:57pm by Roman Olearchyk

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The news from Ukraine is that it doesn’t matter which came first, the chicken or the egg, as long as you profit from both.

The country’s top poultry and egg producers, both leading blue chips listed on the London Stock Exchange, released impressive 2012 results on Tuesday. Continue reading »

Tags: chicken, food manufacturer, Ukraine economy Posted in Europe, Ukraine | Permalink

Why America’s AES sold its Ukraine utilities to Russians

Feb 28, 2013 5:31pm by Roman Olearchyk

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Western energy majors that are knocking on Ukraine’s door, hoping to profit from a potential shale gas bonanza, would be wise to study the sour experiences of US power giant AES.

The US-based company announced earlier this month that it had agreed to sell two regional electricity distributors – Kyivoblenergo and Rivneoblenergo – to a Russian group called VS Energy. Continue reading »

Posted in Europe, Ukraine | Permalink

Ukraine: billionaire Akhmetov seeks partner for offshore energy project

Feb 26, 2013 1:54pm by Roman Olearchyk

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If you’re an international energy major eyeing opportunities in Ukraine, you may want to speak with DTEK, the energy group owned by Rinat Akhmetov, the nation’s richest man (pictured).

He’s looking for a partner for a huge Black Sea hydrocarbon exploration project. Continue reading »

Tags: Akhmetov, energy, Ukraine economy Posted in Europe, Ukraine | Permalink

Yanukovich on tv: guessing games

Feb 22, 2013 6:34pm by Roman Olearchyk

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Sometimes, you shouldn’t read too much into what a politician says on television with voters watching closely. A televised question-answer session with citizens held on Friday by Ukrainian President Viktor Yanukovich is a case in point. Continue reading »

Tags: Gazprom, Ukraine economy, Ukraine politics, Ukraine-IMF Posted in Ukraine | Permalink

Pinchuk: giving away fortune can help to build a fair Ukraine

Feb 20, 2013 1:00pm by Roman Olearchyk

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How hard is it for a multi-billionaire to donate half of his fortune to charity? Most of us will never know.

But if more rich people took this step, the world could become a “fairer” place, according to Victor Pinchuk (pictured). The billionaire businessman this week became the first Ukrainian to join the Giving Pledge launched by US billionaires Bill Gates and Warren Buffett – and promise to give away at least half his money. Continue reading »

Tags: philanthropy, Ukraine politics, Viktor Pinchuk Posted in Ukraine | Permalink

Russia and Ukraine adopt poker faces as questions loom over $7bn gas bill

Feb 8, 2013 6:09pm by Roman Olearchyk

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Photo: Bloomberg

With billions of dollars of natural gas at stake, Ukraine and Russia seem to once again be putting brotherly Slavic love aside in favour of poker-faced brinkmanship.

It’s been two weeks since the FT revealed that Russia’s Gazprom had slapped Ukraine with a whopping $7bn bill for natural gas not supplied in 2012. Strangely, Gazprom has not said much on the matter since then. It could yet challenge Ukraine through arbitration, yet Ukrainian officials appear unphased by the prospect. Continue reading »

Tags: Gazprom, natural gas, oil & gas Posted in Europe, Russia, Ukraine | Permalink

Ukraine raises $1bn and buys time

Feb 5, 2013 10:33am by Roman Olearchyk

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Ukraine’s financially-stretched government has capitalised on high global liquidity, raising an additional $1bn to a 10-year eurobond that it sold last November.

Kiev bought time as talks with the International Monetary Fund on $15bn bailout programme appear set to drag on for weeks, possibly longer. Continue reading »

Tags: IMF, oil & gas, Ukraine economy, Ukraine-IMF Posted in Ukraine | Permalink

Ukraine: Shell deal may transform energy sector, but only with reforms

Jan 25, 2013 4:45pm by Roman Olearchyk

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The ink has not yet dried on the shale gas exploration deal signed on Thursday in Davos between Ukraine and Royal Dutch Shell. The energy giant, which might invest up to $10bn, has yet to commence exploration, let alone find commercially-viable reserves.

Yet Ukrainian officials are already waving the agreement in front of Russia’s Gazprom, counting gas flows and predicting that Kiev may not need costly Russian gas in the future. Continue reading »

Tags: Gazprom, oil & gas, shale, Shell Posted in Europe, Ukraine | Permalink

Ukraine: edging towards IMF deal

Jan 18, 2013 4:46pm by Roman Olearchyk

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Ukraine’s government has provided the first sign that it is willing to further reduce costly – some say unsustainable — subsidies by raising natural gas prices on households.

The unpopular austerity move is a key condition set by the International Monetary Fund for unlocking billion-dollar bailout loans that Ukraine needs to stay afloat this year. Continue reading »

Tags: IMF, Ukraine economy, Ukraine-IMF Posted in Ukraine | Permalink

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Roman Olearchyk