Issue 67
17–23 December 2022

Corporate governance of SOEs

List of CEO candidates for GTSOU leaked to the media. According to Ekonomichna Pravda’s (EP) sources, 19 candidates were longlisted for the position of the CEO of the Gas Transmission System Operator of Ukraine (GTSOU):

  • Viktor Gladun – ex-CEO of the oil and gas company JKX;
  • Dmytro Lyppa – director of the service division of Metinvest;
  • Denys Gordiyenko – ex-CEO of Zoryamashproekt;
  • Petr Chernyshov – ex-president of Kyivstar;
  • Serhiy Oleksiyenko – ex-CEO of Ukrtransgaz;
  • Oleh Terletskyi – member of Ukrhydroenergo’s supervisory board;
  • Andriy Khomenko – director of the technical support division at Naftogaz;
  • Maksym Nemchynov – former Deputy Minister of Energy;
  • Valeriy Shyposha – ex-CEO of Donetskoblgaz;
  • Oleksandr Gorbunov – CEO of Factor Energy Group;
  • Artem Kompan – CEO of JE Energy;
  • Denys Fudashkin – director of economics and finance at Main Gas Pipelines of Ukraine – Mahistralni Gazoprovody Ukrayiny (MGU);
  • Yaroslav Dykovytskyi – adviser to MGU’s CEO;
  • Volodymyr Galushchak – member of Mykolaiv CHP’s supervisory board;
  • Oleksandr Butenko – former director of the bad debt recovery department at Naftogaz;
  • Vitaliy Volynets – former adviser to Naftogaz’s CEO;
  • Viktor Zayets – director of Naftogaz’s labour protection and safety department;
  • Serhiy Elchukov – ex-acting technical director of Poltavaoblenergo; and
  • Mykhailo Zaslavskyi – Deputy Mayor of Vyshneve.

[MGU is the owner of GTSOU, and MGU’s supervisory board acts as the general meeting of GTSOU. It is in that role that the MGU’s supervisory board is running the competitive selection for GTSOU.

Note that GTSOU is registered as a limited liability company, not a joint-stock company. GTSOU does not have an independent supervisory board, and no such board is required by the applicable law. In order to meet best corporate governance practices, a supervisory board with a majority of independent members should be established at GTSOU itself.

MGU announced a competitive selection of CEO candidates for GTSOU on 25 November 2022. No further information has been released publicly, including how many candidates applied or when the selection would be completed.

The submission deadline was 12 December 2022, suggesting that all the applicants were screened, and the longlist was drawn up within less than a week. – SOE Weekly.]

The previous CEO of GTSOU, Serhiy Makogon, was dismissed by MGU’s supervisory board on 16 September. Makogon was succeeded by Paweł Józef Stańczak who was appointed as GTSOU’s acting CEO. Prior to that, Stańczak worked as GTSOU’s Deputy CEO for Development and Transformation.

Makogon said that he became aware of his dismissal when he was on a business trip. He blasted the dismissal as sabotage, aimed at paralysing the work of a strategic company in wartime and the beginning of the autumn-winter period.

Makogon headed GTSOU since its establishment in 2019.

Later, Makogon criticised the new competitive selection, including the fact that the longlist included no foreign candidates. He called the selection formalistic and added that he had no doubt as to who would be shortlisted. Makogon said that many reputable candidates, who were contacted by the executive search company supporting the selection [Odgers BerndtsonSOE Weekly], refused categorically to apply.

Earlier, Makogon emphasised that before his dismissal, MGU insisted on the establishment of an executive board instead of a single CEO position [allegedly aiming at diluting the powers of Makogon without dismissing him – SOE Weekly]. However, now that he has been dismissed, MGU no longer requires any executive board and merely wants to appoint a loyal CEO, Makogon said.

According to media reports, in June, MGU’s supervisory board, without a competitive selection, formally proposed the candidacies of Serhiy Oleksiyenko or Andriy Khomenko as the new CEO of GTSOU to the Cabinet of Ministers, but the government did not approve the appointment.

[Transparency about CEO selections for SOEs implies that the public must know the rules by which the selection takes place, such as nomination policies and procedures. However, confidential information, such as candidates’ names, should not be disclosed. For a detailed explanation, see an earlier article on CEO selections by two SOE Weekly members, Andriy Boytsun and Dmytro Yablonovskyi. – SOE Weekly.]

On 4 October, the Energy Community Secretariat wrote a letter, seen by EP, to Prime Minister Denys Shmyhal and Minister of Energy Herman Galushchenko. In that letter, the Secretariat urged the government to immediately initiate the following key steps to implement GTSOU’s corporate governance action plan:

  • transfer the ownership of GTSOU from MGU to the Ministry of Energy;
  • adopt a new charter of GTSOU, envisaging an independent supervisory board at GTSOU;
  • run a competitive selection of supervisory board members for GTSOU;
  • have an executive board elected and appointed by GTSOU’s new supervisory board after the latter is established.

[In other words, the Energy Community Secretariat insisted that (a) GTSOU should be owned directly by the government rather than MGU, and (b) the establishment, selection, and appointment of GTSOU’s supervisory board should precede any changes in GTSOU’s management, such as the current CEO selection. – SOE Weekly.]

The Secretariat also repeatedly expressed concerns regarding the cumbersome two-level governance structure of GTSOU and its shareholder MGU.

To overcome these shortcomings, the Secretariat continuously supports simplifying the existing structure [implying no role for MGU, including its eventual liquidation – SOE Weekly], while maintaining the highest standards of independence and effective management. In light of recent events, ensuring the swift implementation of the GTSOU’s agreed corporate governance action plan is now more important than ever, the letter reads.

SOE updates

Energy sector

Naftogaz’s new CEO interviewed. Recently appointed Naftogaz’s new CEO, Oleksiy Chernyshov, was interviewed by Forbes Ukraine this week. We selected the key points:

On financial results:

  • “We are currently forecasting a loss [as a financial result of 2022 – SOE Weekly]. However, my goal is to end the year with a profit. We will improve the payment discipline, and we also expect compensation from the state budget for public service obligations (PSOs).”
  • “It is difficult to attract funds because Naftogaz is still in a state of default. One of the first decisions after my appointment was to conclude an agreement with Lazard to assist us in the restructuring of two Eurobond issues: one of $ 350 million maturing in 2022, and one of $ 500 million maturing in 2026. I expect that at the beginning of the next year, we will reach an agreement with the bondholders on this restructuring. The 2024 Eurobond issue has already been restructured [under previous CEO Yuriy Vitrenko – SOE Weekly].”

On demand for gas:

  • “The Cabinet of Ministers has recently introduced a gas PSO: Naftogaz will supply gas to electricity producers at a price lower than the market price, depending on the terms of delivery: UAH 11,000 and UAH 16,500 per 1,000 cubic meters. [According to Ukrainian Energy Exchange, the weighted average price for gas in January 2023 is UAH 33 581,05. – SOE Weekly.] This will enable heat producers to use gas to produce electricity without a loss. But it should be emphasised that the power plants of, for instance, Centrenergo should primarily burn coal. According to the PSO, it may be more profitable for them to work on gas than on coal. But now gas is too expensive for the country to burn when there is coal. Controlling that is a difficult challenge, but we will find a solution.”

[The government has already obligated Naftogaz’s subsidiaries to sell gas on preferential terms to several types of consumers, including households, heating companies, a number of thermal power plants, non-household consumers from the defence sector, and regional gas distribution companies. Most of the PSOs are linked to the duration of the martial law.

According to Naftogaz’s annual report for 2021, indirect subsidies to consumers in 2022 are expected to increase to UAH 842 billion — as much as an astonishing 19% of Ukraine’s nominal GDP. – SOE Weekly.]

  • “The 14.5 billion cubic meters of gas available in storage at the beginning of the heating season would be enough to get through this year’s winter, but the aggressor began to attack electricity facilities [thereby increasing gas consumption – SOE Weekly].”
  • “The main goal now is to maintain the level of gas production and increase imports. We already have the support of the EBRD ($ 300 million), the Canadian government ($ 350 million) and Norway ($ 200 million). These funds will enable us to purchase about 500 million cubic meters of gas. In addition to this, by the end of the heating period, we need almost another 2 billion cubic meters.”
  • In case additional 2 billion cubic meters are not imported, “roughly, we will end up [the heating season – SOE Weekly] with reserves of 6-8 billion cubic meters. But my task is to end the heating season with significantly larger reserves.”
  • “Our task is to accumulate at least 15 billion cubic meters in storage by 15 October 2023, the beginning of the next heating season.”
  • “We should end this year with a production of about 12.5 billion cubic meters. Due to shelling, the 2022 figure may be adjusted. We estimate total losses at $700 million. This is what we could not extract due to shelling, plus infrastructure damage.”
  • Naftogaz plans to increase production next year by 1 billion cubic meters to 13.5 billion cubic meters.”
  • “We should also encourage gas production by private companies. I hope that private producers will produce more than 5 billion cubic meters next year. Now, unfortunately, I don't see them increasing production.”
  • “If the total production next year exceeds 18.5 billion cubic meters, we will be able to do without imports or with minimal imports.”

On Naftogaz’s supervisory board:

  • “As of now, there is an active process of its formation. Naftogaz’s supervisory board may be appointed by the end of January 2023.”

[A competitive selection for Naftogaz’s supervisory board was announced in October 2021, after the remaining members of the previous board were dismissed. The plan was to complete the selection and appoint a new supervisory board by the end of November 2021. Thus, Naftogaz has been operating without a supervisory board for more than a year.

On 4 November, the Cabinet of Ministers decided to launch a new competitive selection for Naftogaz’s supervisory board. It is unclear why the Cabinet did not use the candidates shortlisted from 2021 selection. – SOE Weekly.]

On market tariffs for gas for the households:

  • “There is only one way – the market. The industry suffers from the fact that for many years the tariffs were not market-based, there is no compensation for these tariffs, there is no discipline for settlements. Certainly, we will not raise tariffs in wartime. After the victory, the only way for us is the market. Moreover, it is necessary to understand that our foreign partners, the IMF, also expect these actions from us.”

[On 3 November 2022, by the CMU’s decision No. 983-r, Oleksiy Chernyshov was appointed as Naftogaz’s CEO. Previously, Chernyshov served as the Minister for Communities and Territories Development. He submitted a resignation notice one day before his appointment to Naftogaz, on 2 November. On 3 November, the Verkhovna Rada of Ukraine supported Chernyshov’s resignation.

For a detailed overview of Chernyshov’s appointment, see an earlier article by two SOE Weekly members, Andriy Boytsun and Oleksandr Lysenko: “Changing the company’s charter to fit the person: How the CMU changed Naftogaz’s CEO.”


Ukrposhta receives a € 4.5 million grant from the EBRD for satellite Internet terminals and generators. The European Bank for Reconstruction and Development (EBRD) approved the grant to maintain Ukraine’s internet access via its national postal service, Ukrposhta, in an imaginative solution that aims to keep people even in remote rural areas of Ukraine connected despite Russia’s prolonged attacks on the country’s electricity infrastructure.

A grant of €4.5 million, to be drawn from the EBRD’s Shareholder Special Fund, will support Ukrposhta in buying satellite internet devices and supporting power generators to provide reliable internet connection and mobile charging points across the company’s postal network, the largest in the country.

The grant proceeds will cover 1700 post offices in more than 450 cities and towns. Ukrposhta will top up the EBRD’s €4.5 million with an additional €1.5 million of its own funds for this project, to buy more equipment, including heating stoves, wi-fi routers, and lighting equipment.

Ukrzaliznytsia reaches an agreement to defer the Eurobond payment for two years. Deputy Prime Minister Oleksandr Kubrakov announced on his Facebook page that Ukrzaliznytsia successfully completed the restructuring of payments for two Eurobond issues totalling USD 895 million.Ukrzaliznytsia reached an agreement to postpone the eurobonds’ payement for two years. The Deputy Prime Minister for the Reconstruction of Ukraine - the Minister of Communities and Territories Development and Infrastructure of Ukraine Oleksandr Kubrakov announced on his Facebook page that Ukrzaliznytsia successfully completed the voting procedure of holders for the restructuring of payments for two eurobonds’ issues totaling USD 895 million. 

The holders of these Eurobonds accepted Ukrzaliznytsia’s proposal: Similar to the sovereign debt restructuring, interest and principal payments on Ukrzaliznytsia bonds were deferred for two years.

Repayments of Eurobonds issued in 2019 were deferred from 2024 to 2026, and those issued in 2021, from 2026 to 2028. Coupon payments due in 2023-2024 were deferred until January 2025 with possible capitalisation.

In SOE Weekly (Issue 66), we reported that Fitch Ratings downgraded Ukrzaliznytsia’s Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) to ‘C’ from ‘CC’ following its consent solicitation to defer the debt servicing of its US dollar loan participation notes (LPN) maturing in 2024 and 2026.

S&P Global Rating downgraded Ukrzaliznytsia’s rating from ‘CCC-‘ to ‘CC’ because of the company’s solicitation to defer all payments on the above Eurobonds.


SPF puts a seaport up for privatisation. The State Property Fund (SPF) set the privatisation auction for Ust-Dunaisk trade seaport on 17 January 2023 with a starting price of UAH 60 million. This is to be the first sale of a seaport since the independence of Ukraine.

After the Russian invasion, Ust-Dunaisk was blocked. It resumed its operations on 1 April. For January-September 2022, Ust-Dunaisk received UAH 848,000 in net profit. In January-November, it paid more than UAH 9 million in taxes.

The port consists of three assets: The seaport itself in Vylkovo city (Odesa region), the seaport offices, and a ship service base on the Shabash Island.

Confiscation of the aggressor state’s assets, nationalisation, and expropriation

The state budget received the first UAH 17 billion from the confiscation of Russian banks. The Individual Deposit Guarantee Fund (DGF) said that it ensured the transfer of UAH 17 billion from the liquidated accounts of Russian banks to a special fund of the state budget.

The corporate rights and financial assets were confiscated according to a decision of the National Security and Defence Council dated 11 May 2022, enacted by the Presidential Decree.

According to the DGF, the following funds were transferred: UAH 3.2 billion; USD 372.3 million; as well as smaller amounts in other currencies.

Previously seized ZTR reveals outstanding debts of UAH 11 billion. The Zaporizhzhiatransformator (ZTR) plant, seized by the state and handed over to the Ministry of Defence in November, has multibillion-dollar debts. reported on this, citing the Zaporizhzhia Region Commercial Court, which opened bankruptcy proceedings for the company in October 2019. Creditor claims exceed UAH 11.1 billion. At the beginning of December, the Ministry of Defence of Ukraine, now the owner of ZTR’s shares, became a party to the case.

The court decision published a list of 22 creditors whom the plant owes money. Among the largest ones are:

  • Prominvestbank – UAH 6.1 billion;
  • the former Sberbank – UAH 2.2 billion;
  • ING Bank N.V. (Netherlands) – UAH 741 million;
  • Ukreximbank – UAH 459.6 million;
  • Raiffeisen Bank Aval – UAH 435.7 million;
  • ING Bank (Ukraine) – UAH 214.2 million;
  • Taskombank – UAH 213.9 million.

А number of Cypriot companies also announced creditor claims:

  • Zadano Limited – UAH 182.5 million;
  • Azidano Limited – UAH 182.5 million;
  • Karatano Limited – UAH 182.5 million;
  • Artamare Limited – UAH 146.9 million;
  • Siador Enterprises Limited – UAH 26.1 million.

ZTK is one of the largest manufacturers of electrical equipment in Europe.

[The corporate rights of ZTK, as well as four other large companies (Ukrnafta, Ukrtatnafta, Motor Sich, and AvtoKrAZ), were seized by the state and transferred to the Ministry of Defence according to the Law on the Transfer, Forced Alienation, or Seizure of Property under Martial Law or State of Emergency. According to that law, the state is obligated to return the expropriated assets to the owners or give them a fair compensation.

In turn, back in April, the Verkhovna Rada adopted changes to the law on seizing assets of Russian residents, which allows seizing property from Ukrainian collaborators as well. However, the law has not yet entered into force, as it has not yet been signed by the President. If this law were in effect, the state could seize collaborators’ assets without any compensation and without unfairly expropriating bona fide minority shareholders who happened to own shares in the same companies.

At the same time, the current law does not specify a mechanism for the seizure of corporate rights, which may lead to difficulties and disputes around the mechanism and size of compensation. We are not aware of any legal ban on the bankruptcy of companies that were seized by the state under martial law. If no such ban exists, company assets may be sold to meet creditors’ claims, in which case the state would not be able to ensure continuous usage of the assets seized for its the wartime needs. – SOE Weekly.]

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, Mariia Kramar, Dmytro Yablonovskyi, and Oleksandr Lysenko.

This publication was produced with the financial support of the European Union within project “Supporting Ukraine in rebuilding and recovery” implemented by the KSE Insititute (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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