The fall of the hryvnia leads to massive destruction of private business, – Reuters
London – Kyiv, December 04 (PolitNavigator, Vasily Ablyazimov) – Due to the fall of the hryvnia and the country’s sovereign debt, more and more Ukrainian companies are unable to repay their debt abroad, reports Reuters.
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Many companies and banks are already behind on their debt payments. Rinat Akhmetov's Metinvest company Hhb, for example, last week postponed debt obligations on dollar bonds of 2015 to the end of 2017. The agricultural producer Agroton did the same, asking for the consent of bondholders to postpone payments to 2016.
The agricultural firm Mriya, the pipe manufacturer Interpipe and the banks First Ukrainian International Bank, VAB, Nadra and Finance and Credit are also in trouble. The bonds of all these companies have fallen sharply, Agroton's bonds, for example, are currently valued at 25 cents on the dollar and Mriya's at 15 cents.
“I think that almost the entire corporate sector of Ukraine will be restructured,” says David Spegel, an expert at BNP Paribas.
Ukrainian Eurobonds are selling at 66-70 cents on the dollar. This shows how much investors expect from each dollar invested in the country, says Shpegel, while, in his opinion, the real price of Ukrainian Eurobonds is less than 50 cents.
Avangard-Ukraine, the largest agricultural producer, is a striking example of the difficulties Ukrainian private companies are now facing, Reuters writes. Avangard recorded a net loss of $5,7 million in the first nine months of this year, compared with a net profit of $162 million in the same period in 2013.
For firms like Avangard, with hryvnia revenues and foreign currency loans, a currency crisis makes debt servicing more expensive, while an economic downturn causes cash flows at home to collapse.
English version :: Read in English The fall of the hryvnia leads to massive destruction of private business, – Reuters