Issue 75
11–17 February 2023

Corporate governance of SOEs

Anthony Marino elected as the chair of Naftogaz’s supervisory board. On 10 February 2023, Naftogaz’s new supervisory board elected Anthony Marino as the board chair.

According to Naftogaz, Marino is an exploration and production specialist with over 38 years of experience in the oil and gas sector. He served as executive director, president, and CEO of Vermilion Energy, an international hydrocarbon exploration and production company with a market capitalisation of $4 billion.

Marino also currently serves as president and CEO of the newly established energy company Tenaz Energy. During 2002-2020, he served on supervisory boards or boards of directors of six companies and organisations.

In SOE Weekly (Issue 72), we reported that on 24 January 2023, the Cabinet of Ministers appointed six members to Naftogaz’s supervisory board. The new supervisory board includes the following independent members: Tor Martin Anfinnsen, Anthony Marino, Richard Hookway, and Ludo Van der Heyden. The state representatives include Rostyslav Shurma, Deputy Head of the President’s Office, and Nataliya Boyko, energy advisor to Prime Minister Denys Shmyhal.

[Note that according to Naftogaz’s charter, the supervisory board must consist of seven members: independent members, who must constitute a majority of the board, and state representatives. This means that another board member remains to be appointed. This can be either an independent member or a state representative. The Cabinet has not indicated why no such member has been appointed yet, or who that person will be. – SOE Weekly.]

Former First Deputy Minister of Economy to direct strategy at Ukrnafta. On 13 February 2023, Denys Kudin, who has recently stepped down as First Deputy Minister of Economy, was appointed to head Ukrnafta’s department for strategy, development, and government relations, Ukrnafta’s CEO Serhiy Koretskiy said.

Kudin worked with Koretskiy for the WOG chain of petrol stations in 2013-2018. Kudin has been the First Deputy Minister of Economy since November 2021. Before that, he was First Deputy Head of the State Property Fund (SPFU).

After stepping down from the Ministry of Economy, he wrote on his Facebook page about his plans to “focus entirely on the fuel front”.

In SOE Weekly (Issue 68), we reported that the shares of Ukrnafta, Ukrtatnafta, Motor Sich, AvtoKrAZ and Zaporizhzhiatransformator (ZTR) were seized “for the needs of the state” and transferred to the Ministry of Defence on Sunday, 6 November 2022.

The seizures were made under the Law on the Transfer, Forced Alienation, or Seizure of Property under Martial Law or State of Emergency, which obligates the state to eventually return the seized assets to the owners or give them fair compensation.

[Naftogaz owns 50% + 1 share of Ukrnafta. These shares were not seized. A group of companies informally known as the Privat group, associated with oligarchs Ihor Kolomoiskyi and Hennadiy Boholyubov, owned about 42% of the shares.

The remaining shares were held by some 11,000 dispersed shareholders, including company’s former or current employees, investment funds, and pension funds. All these shares were seized by the state along with those of the Privat group. – SOE Weekly.]

After the seizure, the state replaced the supervisory boards and executive management at most of these companies. On 7 November 2022, the Ministry of Defence as Ukrnafta’s new shareholder appointed a new supervisory board of the company.

Former CEO of the WOG chain of petrol stations chain Serhiy Koretskyi became the CEO of both Ukrnafta and Ukrtatnafta on 8 and 10 November, respectively.

Ukrgasbank’s CEO resigns. On 9 February 2023, Ukrgasbank’s CEO Andrii Kravets filed his resignation due to deteriorating health.

On 10 February 2023, the supervisory board accepted Kravets’s resignation and appointed Rodion Morozov as the acting CEO, effective 13 February 2023.

Morozov is Ukrgasbank’s Deputy CEO. He has worked at Ukrgasbank since October 2009. From 2013 to 2016, he was an advisor to the CEO. From 2016 to 2020, he worked as director of the bank’s green finance department. In 2020, Morozov was appointed as a member of the executive board / Deputy CEO.

[According to the licensing regulations of National Bank of Ukraine (NBU), a bank may have an acting CEO for no longer than six months. After that, a permanent CEO – to be approved by the NBU – must be appointed. – SOE Weekly.]

Ukrgasbank gets a new supervisory board. On 10 February 2023, Ukrgasbank’s general meeting of shareholders terminated the powers of supervisory board chair Teimour Bagirov and independent board members Shrenik Davda, Slawomir Konias, and Oksana Volchko.

Taras Yeleiko, former Deputy Head of the SPFU, was appointed as the new board chair. In addition to Yeleiko, the new independent members of the board are Per Anders Fasth, Sanela Pasic, and Dariusz Gafka.

At the same time, independent member Yuriy Blashchuk and two state representatives – Yana Bugrimova (former chief of the Reform Office of the Ministry of Finance) and Maryna Lazebna (former Minister of Social Policy of Ukraine) – were re-appointed for a new term.

In SOE Weekly (Issue 73), we reported that, on 27 January 2023, the Cabinet of Ministers approved the candidacies of five independent members of Ukrgasbank’s supervisory board, based on the results of a competitive selection.

[The competitive selection to find supervisory board members for the other three Ukrainian state-owned banks – PrivatBank, Oschadbank, and Ukreximbankstarted simultaneously on 11 October 2022, with application deadlines of 11 November 2022.

In SOE Weekly (Issue 69), we reported that, on 27 December 2022, the Cabinet of Ministers dismissed almost all independent members of PrivatBank’s supervisory board and appointed new ones after a competitive selection.

There have not yet been any public updates on the selections for Oschadbank or Ukreximbank. – SOE Weekly.]

The State Property Fund changes CEOs at 47 SOEs, including UMCC. On 14 February 2023, the State Property Fund of Ukraine (SPFU) announced that it began dismissing SOE managers found to be lacking integrity.

According to SPFU, seven companies already received new CEOs, and another 40 are awaiting approval from local military administrations.

SPFU’s analysis of SOEs’ performance revealed that most SOEs were not fulfilling their financial and economic plans and were taking losses, First Deputy Head of SPFU Dmytro Klimenkov said. According to him, SPFU is already looking for new managers for SOEs.

The Fund has developed KPIs [key performance indicators – SOE Weekly] for the new managers to ensure that they properly prepare SOEs for privatisation at the highest possible prices, Klimenkov added.

On 15 February 2023, SPFU announced dismissal of the acting CEO of United Mining and Chemical Company (UMCC), Vladyslav Itkin. 100% of UMCC’s shares are held by SPFU, and the company is slated for privatisation.

According to SPFU, this dismissal decision was based on a thorough internal financial and economic audit of the company. The SPFU team is also working closely with law enforcement agencies on UMCC.

In SOE Weekly (Issue 33), we reported that the UMCC privatisation auction was scheduled to take place on 31 August 2021. Later, in SOE Weekly (Issue 41), we reported that SPFU cancelled that privatisation auction, which had only one qualified bidder.

The media then published a list of participants allegedly interested in UMCC assets. Some of them said that the asset was not well prepared for privatisation, and they did not consider the auction terms fair. Others claimed that the starting price was inadequate. It was reportedly impossible to estimate the company’s mineral deposits.

SPFU’s Auction Commission set 29 October 2021 as the new auction date.

In SOE Weekly (Issue 49), we reported that SPFU cancelled the 29 October 2021 auction as well. SPFU then explained that it only received two auction applications, one of which did not meet the requirements. SPFU’s Auction Commission then set a new auction date again, 20 December 2021.

In SOE Weekly (Issue 56), we said that BDO Corporate Finance, SPFU’s adviser on the privatisation of UMCC, said that international companies were not prepared to participate in the UMCC auction despite their interest in these assets. BDO said that this was because there were no warranties that would protect the prospective buyers’ investments. As of 14 December 2021, the Cabinet of Ministers had not approved the privatisation terms of the UMCC auction that would include such warranties.

In SOE Weekly (Issue 57), we reported that SPFU postponed UMCC’s privatisation auction for the third time. Just like in October 2021, SPFU said that it received two auction applications, one of which did not meet the requirements of the applicable law.

Holding an auction with only one participant is not allowed by the privatisation law. For that reason, the UMCC privatisation auction was declared invalid [for the third time – SOE Weekly]. At that time, SPFU noted that a new date for the UMCC auction would be set on a separate occasion.

SOE updates

Energy sector

Naftogaz discusses Eurobond restructuring with creditors – bondholders oppose new proposal. On 10 February 2023, Naftogaz announced consultations on the restructuring of its Eurobond liabilities with financial advisor Lazard and legal advisor Freshfields Bruckhaus Deringer. This concerns Eurobonds maturing in 2022 and 2026.

The company failed to reach a restructuring agreement with its creditors and defaulted on its payments on these bonds in 2022. At the time, the bondholders were offered a two-year deferral of payments under the same terms as those previously agreed upon by the state of Ukraine for its sovereign debt and a number of state-owned entities, such as Ukravtodor.

According to the company’s notice to noteholders, on 15 April 2023, Naftogaz is prepared to pay the overdue 19 July 2022 coupon plus interest on its 2022 Eurobonds. As for its 2026 Eurobonds, the company offers to pay a 0.5% exchange fee and repay the principal in November 2027 and November 2028, instead of paying 100% in November 2028 as before.

According to Bloomberg, creditors advised by Cleary Gottlieb Steen & Hamilton LLP oppose the company’s restructuring proposal, as they believe that Naftogaz has the ability to make the payments.

According to the media, this group of creditors has enough influence to prevent Naftogaz from getting the support of 75% of creditors needed to approve the restructuring.

The group presented its own plan that takes into account Naftogaz’s financial condition as well as legitimate concerns about its need to fully support Ukraine’s economy and its vital infrastructure.

Bloomberg said that while the group’s opposition may delay the remedying of the defaults, the creditors have not initiated any payment acceleration or asset seizure process.

In SOE Weekly (Issue 68), we reported that, on 26 July 2022, Naftogaz defaulted on its Eurobonds due to the Cabinet of Ministers’ refusal to approve payments on them.

Earlier, on 21 July 2022, acting in the capacity of Naftogaz’s general meeting, the Cabinet issued an order formally instructing Naftogaz to seek Cabinet’s approval before executing any transactions related to the company’s Eurobonds.

Under previous CEO Yuriy Vitrenko, Naftogaz then reached an agreement with bondholders on the restructuring of the Eurobond issues maturing in 2024 (€ 600 million), while restructuring of Eurobond issues maturing in 2022 ($ 350 million) and in 2026 ($ 500 million) was still being negotiated.

Naftogaz’s new CEO Oleksiy Chernyshov, who was appointed on 3 November 2022, expected that in early 2023, the company would reach an agreement on the restructuring with the holders of the 2022 and 2026 Eurobonds.

Ukrenergo’s CEO interviewed. Ukerenergo’s CEO Volodymyr Kudrytskyi was interviewed by Bloomberg this week. We selected the key points:

On the situation with Ukrainian energy system:

  • “The worst is over with Russia’s attacks on the Ukrainian energy system. The adversary has largely lost the ability to inflict significant damage.”
  • “One shouldn’t relax and believe that Russia’s air-strike campaign is over.”
  • “Spring and summer won’t be easy. If the shelling is over and we are provided with an opportunity to restore [the damaged infrastructure – SOE Weekly] without interruption, we will likely achieve a long-term non-shortage period, but we can’t rely on that.”

On the damage to Ukraine’s power grid:

  • “Direct damage to Ukraine’s power grid will run into the hundreds of millions of dollars, with economic losses ranging in the billions. A preliminary estimate will emerge in the coming weeks.”

On the restoration of damaged power infrastructure:

  • “Ukrainian repair teams have cut the time it takes to replace highly coveted transformers to a quarter of the duration in the fall.”
  • “At this point we’ve reached a plateau – further degradation is not happening. We are able to restore at the same pace as the destruction is made, sometimes even faster.”

In SOE Weekly (Issue 74), we reported that Russia launched another missile and drone attack on Ukraine’s energy infrastructure. This was Russia’s 14th attack in its series of mass missile attacks and 16th in the series of drone attacks [since 10 October 2022 – SOE Weekly], Ukrenergo said.

[After every Russian mass missile attack on Ukraine’s vital infrastructure, emergency outages take place, lasting for days due to the ongoing repair works. During such outages, people in Ukraine are left without electricity, heating, water supply, or access to mobile phone networks. – SOE Weekly.]


The state budget receives UAH 645 million from privatisation since the beginning of 2023. On 16 February 2023, MP Roksolana Pidlasa (Sluha Narodu faction), Chair of the State Budget Committee, wrote on her Facebook page that since the beginning of 2023, the state budget has received UAH 645 million from the privatisation of state property.

Since the re-launch of small-scale privatisation in late August 2022, the state budget has received an average of about UAH 470 million per month. In total, the budget has received UAH 1.7 billion from small-scale privatisation auctions in 2022, Pidlasa said.

In SOE Weekly (Issue 68), we reported that from 19 August 2022 to the end of 2022, Prozorro.Sale conducted 220 privatisation auctions. As a result, the state and local budgets expected to receive UAH 1.5 billion.

The most expensive assets sold during the war in 2022 include the Lviv Jewellery Factory (UAH 185 million); Maryliv alcohol distillery (UAH 150 million); Vuzliv alcohol distillery (UAH 130 million); and Zalozetsk alcohol distillery (UAH 120 million).

Confiscation of the aggressor state’s assets, nationalisation, and asset seizure

SBU stops Russian oligarchs Shelkov and Chemezov from preventing nationalisation of their assets in Ukraine. On 15 February 2023, the Security Service of Ukraine (SBU) exposed attempts by sanctioned Russian oligarchs Sergei Chemezov and Mikhail Shelkov to prevent nationalisation of the assets of the companies that Chemezov and Shelkov formerly owned in Ukraine.

These are the Demurinsky Mining and Processing Plant and the agricultural holding Invest Agro, which were confiscated in favour of the Ukrainian state by the High Anti-Corruption Court (HACC).

According to SBU, after the court ruling, the former Russian owners of these companies tried to illegally “hide” the following assets:

  • more than 100 units of automotive and specialised equipment;
  • 6 railcars of agricultural products;
  • more than 5,500 containers with ilmenite ore, which is used in the production of titanium;
  • almost 1,200 tonnes of fertilisers and agricultural products.

The total value of these goods is UAH 150 million.

In SOE Weekly (Issue 74), we reported that, on 3 February 2023, the HACC satisfied an appeal by the Ministry of Justice and confiscated the Demurinsky Mining and Processing Plant owned by Russian oligarch Mikhail Shelkov.

Confiscated Russian assets to be auctioned. On 10 February 2023, the Cabinet of Ministers approved the sale of confiscated Russian assets via electronic auctions.

According to Prime Minister Denys Shmyhal, all the proceeds from these sales will be transferred to a special fund towards mitigating the damage of the Russian aggression. The auctions will follow the same procedure as small-scale privatisation auctions.

HACC seizes property of Russian oligarch Deripaska. On 16 February 2023, the High Anti-Corruption Court (HACC) satisfied the claim of the Ministry of Justice and ruled to transfer companies owned by sanctioned Russian oligarch Oleg Deripaska to Ukrainian state ownership.

According to the HACC, the following assets were recovered for the state:

  • the corporate rights of 13 legal entities, including Mykolaiv Alumina Plant LLC and Hlukhiv Quartzite Quarry LLC;
  • integral property complexes [such as production sites along with real estate and equipment located there – SOE Weekly];
  • real estate, such as apartments and buildings;
  • cars, trucks, and specialised equipment; and
  • UAH 32 million in cash.

The ruling may be challenged in the HACC’s Chamber of Appeals within five days from the date of the ruling, the court added.

According to SBU, Deripaska’s seized assets are worth UAH 10 billion.

Deripaska is part of Russia’s inner military and political leadership circles. He had tried to conceal his ownership of assets in Ukraine through controlled commercial structures.

In SOE Weekly (Issue 73), we reported that on 30 January 2023, the Prosecutor General’s Office (PGO) announced the seizure of UAH 32 million from Deripaska’s Mykolaiv Alumina Plant LLC, the largest producer of metallurgical alumina and aluminium hydroxide in Ukraine.

Previously, the courts had seized Deripaska-controlled assets including 12 plots of land, a seaport complex, apartments, administrative buildings, production workshops, 46 vehicles, and 240 units of special equipment, all worth more than UAH 1 billion in total.

[Apparently, these are the same assets as the assets later confiscated by HACC as described above. – SOE Weekly.]

In SOE Weekly (Issue 70), we reported that the Ministry of Justice filed a lawsuit with the HACC, seeking to seize assets belonging to Deripaska.

Procurement Notices – powered by Prozorro

Together with Prozorro, we selected procurement notices announced by top 15 Ukrainian SOEs and four state-owned banks from 9 to 16 February with an expected value of more than UAH 1,000,000. State Food and Grain Corporation, Automobile Roads of Ukraine, and PrivatBank are not subject to the requirement to use Prozorro by law and have not used it in the past four years.

Organiser Expected value, UAH CPV Classification
Energoatom 1,407,757 24000000-4 Chemical products
Energoatom 3,567,532 42000000-6 Industrial machinery
Energoatom 8,653,650 24000000-4 Chemical products
Energoatom 87,977,765 50000000-5 Repair and maintenance services
Energoatom 311,254,905 50000000-5 Repair and maintenance services
Energoatom 166,385,965 31000000-6 Electrical machinery, apparatus, equipment and consumables; lighting
Energoatom 3,337,000 24000000-4 Chemical products
Energoatom 5,978,192 42000000-6 Industrial machinery
Energoatom 9,714,132 24000000-4 Chemical products
Energoatom 132,221,489 38000000-5 Laboratory, optical and precision equipments (excl. glasses)
Ukrhydroenergo 2,039,411 09000000-3 Petroleum products, fuel, electricity and other sources of energy
Ukrhydroenergo 2,806,310 09000000-3 Petroleum products, fuel, electricity and other sources of energy
Ukrhydroenergo 4,097,946 09000000-3 Petroleum products, fuel, electricity and other sources of energy
Ukrhydroenergo 1,177,769 66000000-0 Financial and insurance services
GTSOU 2,235,938 50000000-5 Repair and maintenance services
GTSOU 29,993,329 38000000-5 Laboratory, optical and precision equipments (excl. glasses)
GTSOU 40,760,895 38000000-5 Laboratory, optical and precision equipments (excl. glasses)
GTSOU 33,590,933 34000000-7 Transport equipment and auxiliary products to transportation
GTSOU 1,706,468 35000000-4 Security, fire-fighting, police and defence equipment
GTSOU 5,128,705 45000000-7 Construction work
Ukrenergo 11,627,796 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 9,305,838 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 20,634,286 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 8,314,972 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 7,895,812 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 2,326,216 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrenergo 1,788,775 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrposhta 11,215,180 39000000-2 Furniture (incl. office furniture), furnishings, domestic appliances (excl. lighting) and cleaning products
Ukrposhta 1,929,600 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrposhta 11,850,000 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrposhta 1,938,860 30000000-9 Office and computing machinery, equipment and supplies except furniture and software packages
Ukrposhta 3,388,000 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrposhta 5,136,000 09000000-3 Petroleum products, fuel, electricity and other sources of energy
Ukrposhta 2,243,600 44000000-0 Construction structures and materials; auxiliary products to construction (except electric apparatus)
Ukrposhta 2,905,150 38000000-5 Laboratory, optical and precision equipments (excl. glasses)
Osсhadbank 1,293,480,900 30000000-9 Office and computing machinery, equipment and supplies except furniture and software packages

Ukrainian SOE WeeklyTM is an independent weekly digest based on a compilation of the most important news related to state-owned enterprises (SOEs) and state-owned banks in Ukraine.

Editorial team: Andriy Boytsun, Dmytro Yablonovskyi, Oleksandr Lysenko, Oleksii Pavlysh, and Mariia Kramar.

This publication was produced with the financial support of the European Union within the project “Supporting Ukraine in rebuilding and recovery” implemented by the KSE Institute (Contract NI/2022/424-502 dated 14 November 2022). The contents of this publication are the sole responsibility of the editorial team of the Ukrainian SOE Weekly and do not necessarily reflect the views of the European Union.

© 2020–2022 Andriy Boytsun, all rights reserved.


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