News (#03 March 2016)

Biznews

M&A

Dragon Capital acquired 19.99% of the Ukrainian Exchange

Investment Company Dragon Capital s.r.о. completed the acquisition of a 19.988% stake in PJSC Ukrainian Exchange (UX). The National Securities and Stock Market Commission provided its approval to the company for this acquisition on 12 January and on 5 February 2016 Dragon Capital announced the transaction’s closure.

The Ukrainian Exchange was established in May 2009 and was a joint project of Ukrainian securities market participants and PJSC Stock Exchange.

Chinese company acquired Chicago Stock Exchange

Chinese Investment Company Casin Group announced the acquisition of Chicago Stock Exchange. For the first time, a company from China will be the owner of a stock exchange in the USA. The Board of Directors voted unanimously for the acquisition, but the transaction is subject to approval by a competition authority. The financial terms of the transaction are not being disclosed and it is to be closed in the second half of 2016.

Chinese Diversified Holding Company Casin Group, whose headquarters are in Chungking, has been investing in financial services, real estate and the environment.

Shell completed its merger with BG Group

The UK-Dutch oil and gas company Royal Dutch Shell has completed the largest oil and gas deal-of-the-decade by its acquisition of the British company BG Group. The value of the deal amounted to about USD 70 billion.

Information on the reaching of agreement on the deal was announced in April 2015. Shell specified that the acquisition of BG will increase proven oil and gas reserves of Shell by 25%, production by 20%, and it will also strengthen the company’s position in new oil and gas projects, particularly in liquefied natural gas projects in Australia and in deep-water projects in Brazil.

 

Legal Business

Naftogaz invited bids for legal support abroad

NJSC Naftogaz of Ukraine has invited bids for representing its company interests in foreign jurisdictions, including foreign state agencies, institutions, foreign or international courts, arbitration courts, international organizations, in relations with other persons.

The legal support, in particular, provides for representation of the company’s interests during meetings and negotiations conducted with representatives of foreign companies, organizations and institutions of foreign states and other individuals and legal entities, including on issues relating to the conclusion of treaties (agreements, contracts).

In addition, the legal support stipulates representation of the company’s interests in dispute adjudication in foreign courts or international arbitration courts.

Bidders should meet eligibility criteria and, in particular, should have offices located in Ukraine, EU countries, including Great Britain, the Middle East, the USA, and China. Accordingly, staff competence should be confirmed.

The expected marginal cost of purchase of legal services is UAH 16.87 million. The service period is until 31 December 2016. Bids will be accepted until 22 March.

 

Currency Regulation

Ukrainians will be able to receive e-money from abroad

The National Bank of Ukraine adopted Decree On Introduction of Amendments to the Regulation on E-Money in Ukraine of 10 February 2016, No.65, by which it granted the right to users — individuals and legal entities — to receive from non-residents e-money issued by a foreign issuer using international online payment systems. The document came into effect on 13 February 2016.

The Decree simplified the procedure for mutual approval of rules on using e-money for member banks/participants of domestic payment systems.

The withdrawal of funds from international online payment systems should be carried out to accounts of individuals opened in Ukrainian banks using payment instruments of international payment systems (payment cards).

Then an individual customer of a Ukrainian bank can make both non-cash transactions with this money and receive it in the form of cash.

 

Banking & Finance

Agreement with the European Investment Bank ratified

A loan agreement between the European Investment Bank and the Minister of Regional Development, Construction and Housing and Public Utilities Sector of Ukraine has been signed on 23 July 2015. According to the agreement between Ukraine and the EIB, the latter will appropriate EUR 400 million for development of the municipal infrastructure. The funds will be committed to the development and rehabilitation of the municipal heat supply and hot water supply, centralized and non-centralized potable water supply, household waste handling, as well as external lighting of population centers. Ukraine represented by the Ministry of Finance, acts as a borrower of the EIB’s funds, and the Ministry of Regional Development, Construction and Housing and Public Utilities Sector acts as project contractor. A fixed or floating interest rate provided for by the agreement shall be determined by the borrower as of the date of the funds receipt. The total loan repayment period is from 15 years, and a grace period from 3 to 8 years is stated. Local authorities, central and local executive authorities and municipal enterprises, including enterprises, the state or municipal share in which is more than 50%, may be the ultimate beneficiaries.

 

Oil & Gas

Act on virtual gas reverse flows from Europe adopted

On 4 February 2016 the Verkhovna Rada of Ukraine passed in the second reading the Draft Act On Introduction of Amendments to the Tax Code of Ukraine with Regard to the Creation of Conditions for a New Model of the Natural Gas Market. The adoption of this Draft will allow the Tax Code of Ukraine to be brought into line with provisions of the On Natural Gas Market Act and will upgrade the liquidity of the domestic market and power supply security. This document will enable OJSC Ukrtransgaz to provide natural gas substitution services to customers. Such a transaction involves ensuring two-way natural gas flow in the gas transmission system without its physical flow by offsetting counter-current gas streams. Ensuring the possibility to carry out natural gas substitution transactions is a requirement of EU legislation to the GTS operator. In order to carry out virtual gas reverse flows, on 29 May 2015 the Ukrainian gas transmission system operator Ukrtransgaz and the Hungarian operator FGSZ signed an agreement on integration of transborder gas pipelines (the interconnection agreement). The agreement relates to all gas pipelines crossing the Ukrainian-Hungarian border.

 

 

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