Art of the deal: Top 5 busi­ness events in 2017

Kyiv Post - - National - BY JOSH KOVENSKY [email protected]­POST.COM

For Ukraine, a coun­try strug­gling to change its oli­garch-run econ­omy to a com­pet­i­tive one, 2017 has been one more ex­am­ple that the coun­try has a long way to go. Here are the top five deals of the year:

Pri­vatBank Priv

Af­ter the gov­ern­ment guar­an­teed $5.6 bil­lion in cash al­legedly e em­bez­zled by bil­lion­aire oli­garch li Igor Kolo­moisky and Gen­nadiy Bo­golyubov from Pri­vatBank, it’s hard not to con­clude that the year’s big­gest deal was the gov­ern­ment’s de­ci­sion to nei­ther in­ves­ti­gate nor pros­e­cute the pair for this mas­sive theft through in­sider loans, and to block at­tempts to re­trieve the money in

ALon­don. Lon

Eu­robond sale

Ukraine raised $3 bil­lion on in­ter­na­tional cap­i­tal mar­kets in a Septem­ber Eu­robond is­suance, re­flect­ing ei­ther op­ti­mism among for­eign in­vestors or a dearth of op­tions in the global bond mar­ket or both. The gov­ern­ment proved it could find fi­nanc­ing other than from the In­ter­na­tional Mon­e­tary Fund, its main backer, lead­ing to back­slid­ing in IMF- IMF-man­dated ma re­forms.


Bil­lion­aire oli­garch Ri­nat Akhme­tov lost con­trol of 4 40 fac­to­ries in Rus­sianoc­cu­pied Don­bas, while his en­ergy com­pany DTEK saw a huge • Min­eral fu­els, in­clud­ing oil and prod­ucts from its re­fin­ing (23.2 per­cent), are im­ported n large quan­ti­ties. This in­cludes nat­u­ral gas, which Ukraine brings in from Europe. • Chem­i­cal prod­ucts (13.4 per­cent) are used in in­dus­trial pro­cesses, and are

im­ported whole­sale by the coun­try’s fac­to­ries. • Nu­clear re­ac­tors, boil­ers, and ma­chine tools (11.7 per­cent). are im­ported from Ger­many for use in fac­to­ries across the coun­try. Ukraine’s nu­clear re­ac­tors are relics from the Soviet era. • Ground trans­port ve­hi­cles, not in­clud­ing trains (8.3 per­cent), ac­count for a large por­tion of im­ports due to Ukraine’s weak do­mes­tic au­tomak­ing in­dus­try. • Elec­tron­ics (8.2 per­cent) are largely im­ported from China, with Ukrainian con­sum­ing phones and com­put­ers pro­duced by Huawei, Len­ovo and Al­ca­tel. spike in prof­its thanks to the coun­try’s Rot­ter­dam+ scheme — a gen­er­ous pric­ing for­mula which seems to have no eco­nomic ra­tio­nale be­yond en­rich­ing coal-pro­duc­ing oli­garchs. Un­der the lav­ish sub­sidy, Ukraine prices coal at Nether­lands rates plus the cost of trans­porta­tion to Ukraine. Akhme­tov added $1 bil­lion in 2017 from his 2016 net worth, ac­cord­ing to a Bloomberg cal­cu­la­tion.

RRus­sian exit

Rus­sian com­pa­nies exit Ukraine, sell­ing off at least $150 mil­lion in as­sets. Rus­sian in­surer In­gosstrakh, Lukoil, and Evraz all sold out this year to Ukrainian in­vestors.

Tigipko’s Ti re­turn

Busi­ness­man and Pri­vatBank founder Sergiy Tigipko bought Sber­bank s sub­sidiary VES Bank, $43 mil­lion in li­a­bil­i­ties of the de­funct Dia­man­tBank and two fac­to­ries from Rus­sian in­vestors this year.


A worker cleans win­dows of Pri­vatBank in Kyiv on June 1. (Volodymyr Petrov)

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