Investing in Ukraine Ukraine is enmeshed in a political and economic tugof-war between Russia and the West that is becoming more complex and risky as foreign financial institutions line up to support the new government in Kiev. The national elections held in May have been presaged by the appointment of several new ministers, including investment banker Valeriya Hontareva as governor of the National Bank of Ukraine (NBU) Governor. She has worked in international and Ukrainian financial institutions for almost 20 years. Hontareva faces daunting challenges on multiple fronts. The International Monetary Fund readily acknowledges that the current $27 billion support program for Ukraine from IMF, the European Union, the World Bank and others, is not likely to be enough to stabilize the country’s finances without additional inflows of capital. activities to help guarantee the supply of the nation’s basic needs. Agroliga, for example, recently acquired rights to a large parcel in Derhachi district, within the Kharkiv region, to plant more crops. The company also plans to expand food processing capacities. Foreign willingness to consider new investments in Ukraine has been aided by recent financial reforms, according to Pro Capital Group analysis. Capital requirements for business registration have been eased, property rights registration periods have been accelerated, and tax reform for mid-sized to large corporations has been streamlined, including the introduction of electronic filing. Sergey Evtushenko, the head of the State Investment Projects agency, also is seeking to to enhance the country’s business environment by reducing administrative barriers, strengthening the fight against corruption, and establishing networks for investment. SPECIAL COUNTRY REPORT NOVEMBER 2014 CONTACT INFORMATION Christine Cavolina +44 207 303 1703 [email protected] Ernest McCrary +1 212 224 3844 [email protected] Joseph N. Parsons +1-212-224-3159 [email protected] Natalia Shadricheva [email protected] +44 207 303 1729 Preparing for new investment While larger Ukraine corporations may find it difficult to refinance this year with risk-wary banks in the West, mid-cap Ukraine companies may yet be able to turn to active private equity lenders such as Horizon Capital or multilateral lenders such as the International Finance Corp. Industrial Milk (IMC), for example, secured a $30 million long-term loan from IFC earlier this year for working capital and expansion of IMC’s agricultural operations. Other Ukrainian companies also are stepping up In its November 2014 issue, Institutional Investor will publish a special report on Investing in the Ukraine. The report will inform investors of new opportunities in investing in areas including: • Investment opportunities in agriculture, real estate, telecoms, food processing and other sectors • Opportunities for partnerships in key governmentfinanced projects • International banking, money management and other financial demand segments • And the growth of non-bank financial investments Commitments: October 1, 2014 Ad materials: October 15, 2014 www.institutionalinvestor.com