Today's Contents
Reporter's Notepad: IPO frenzy? Chat about IFIs acting as catalysts for Ukrainian IPOs, privatization via IPOs, and the sectors most ready to go public.
Just The Facts:
- Ukraine defense minister faces corruption probe amid internal dispute over arms procurement
- Ukraine's central bank is preparing to launch a pilot project for e-hryvnia
- Ukraine seizes $50 million worth of bauxite and alumina from Russian magnate Deripaska
- South Korea to help rebuild missile-hit children's hospital and veterans' center in Ukraine
- Finland to fund €2 million environmental damage assessment of Ukrainian water resources
- UK government names Labour Party MP Sobel as trade envoy to Ukraine
Here's What They Think:
- CSIS: Trump's coercive diplomacy alone won't secure lasting peace in Ukraine
- Ritter: Trump's Ukraine peace plan is unrealistic and could backfire
- Newsweek: Trump's shift on Ukraine signals strategic break from Putin
Sober Second Thought:
- Use of state e-services in Ukraine has declined but remains strong, UNDP study finds
Dear premium subscriber,
The Ukrainian government has nationalized many profitable assets over the past 10 years of conflict with Russia and it should use them during the coming reconstruction period to catalyze the market for Ukrainian IPOs.
So says Mykola Stetsenko, president of the Ukrainian Bar Association.
His comment was one of several interesting observations made in a discussion hosted late yesterday by the bar association and the US Ukraine Business Council (USUBC).
Privatization via IPO?
"In the past 10 years, the Ukrainian government has nationalized or expropriated really good assets," said Stetsenko, who is also the head of Corporate/M&A practice at Ukrainian law firm Avellum. "We're talking about really good assets, like Privat Bank, which is the leading bank in Ukraine, and Ukrnafta, which is a major Ukrainian producer of oil, and Naftogaz, which is a gas producer and supplier, etc."
"The government is being pushed by various donors to consider privatization. Normally they think about privatization via sale to a strategic investor. I keep telling the government that they should be thinking about doing IPOs in Ukraine, doing a potential secondary or dual listing on the London Stock Exchange or NASDAQ on New York Stock Exchange."
"This would provide the Ukrainian people, but also foreign investors, an opportunity to invest into these really valuable blue chip companies. As a minor uptick it would actually provide the impetus to create a stock market in Ukraine that is active and provides opportunities for Ukrainian pension funds to invest."
"So if someone is looking at that perspective, especially someone with the government agencies or donors, I would urge them to seriously consider that opportunity and to talk with the government about that as well."
IPOs in Banking, Agriculture, Energy, Manufacturing
Ihor Olekhov, head of banking and finance practice in Ukraine at the global law firm CMS, argued that companies with significant support from international financial institutions, like leading lender Privat Bank and MHP, Ukraine's largest poultry producer, are in a strong position to lead a Ukrainian push into the global IPO market.
"Even with the war and even with all these geopolitical risks, Ukraine is a very good market for IPOs," he said. "First of all, there are a lot of sectors in the Ukrainian economy which actually have very profitable companies even during the war.
- "For example, banking continues to be profitable even during the war.
- "Agricultural companies in Ukraine are producing goods for export and to this date they are profitable.
- "Energy companies, including state owned companies in the energy sector. Some of them are already ready for IPOs.
- "We also have a number of companies in the manufacturing areas which continue to benefit from the free trade agreement with the European Union. They would basically become the next wave of leading companies in Ukraine."
- "And finally, Ukraine, because of the war, has a lot of undiscovered IT companies in defense and dual use goods production.
"In these sectors, there are already Ukrainian companies with very profitable business models and which can be presented for IPOs, either directly on Nasdaq or via SPACs," he said. "The opportunities here are enormous. It's only a question of time before we see investors looking into these sectors and IPOs being done on Nasdaq."
IFIs as IPO Catalysts
"And of course, in many of these sectors, we see support from international financial institutions, which are ready to provide either technical assistance or actually provide resilience to Ukrainian businesses," Olekhov added. "Some of them are also shareholders of large Ukrainian companies, including companies in the financial sector. And if such companies with such shareholders consider an IPO as a way to raise capital, the chances of successful placements are much greater."
Now, on to the headlines ...
As always, message the editor at adam.brown@ukrainerebuildnews.com with any complaints, suggestions, tips or other inquiries.
Ukraine defense minister faces corruption probe amid internal dispute over arms procurement
The National Anti-Corruption Bureau of Ukraine (NABU) opened a criminal case investigation involving the country's Defence Minister Rustem Umerov, which could worsen a dispute within the ministry over arms procurement, Reuters reported, citing NABU.
The investigation — which was requested by a corruption watchdog — would look into allegations of abuse of authority, which could damage ties with Kyiv's important Western allies.
NABU accused Umerov of illegally sidelining Maryna Bezrukova, the head of the Defence Procurement Agency (DPA), by refusing to renew her contract after criticizing the agency's work, Reuters reported.
On Jan 24, Umerov said via Facebook that he wouldn't extend Bezrukova's contract as head of the agency, alleging unsatisfactory performance. Umerov also submitted a petition to the Cabinet of Ministers to dismiss the deputy, Dmytro Klimenkov.
The following day, the DPA issued a statement via Facebook saying only the Supervisory Board has the authority to extend or terminate contracts, indicating that Umerov's decision is void and null.
Umerov was appointed as minister in 2023 following months of corruption allegations against the ministry, and the DPA was charged with ensuring more accountability in arms procurement.
The agency cut out intermediaries to minimize risk of corruption, and the appointment of Bezrukov as head of DPA was praised by anti-corruption lobbyists and Ukraine's Western allies.
Bezrukov told Reuters that he has not received any complaints about her work, adding: "This has effectively spoiled a year of our work to a significant degree. … Confidence is built over a long time, but it can be destroyed very quickly."
Bezrukova was appointed as head of the agency in January 2024 and her contract expires at the end of January 2025. She has previously stated that she intends to continue to perform her duties as head of DPA.
Ukraine's central bank is preparing to launch a pilot project for e-hryvnia
The National Bank of Ukraine (NBU) is exploring the possibility of launching its own retail digital currency (CBDC), the e-hryvnia, with a pilot project currently in preparation, NBU Deputy Chairman Oleksiy Shaban said.
According to Shaban, the e-hryvnia is intended to complement, not replace, cash and bank account balances and would serve as an additional option for users to choose from, rather than a substitute for traditional money.
"However, as of now, no decision has been made regarding the large-scale issuance of the e-hryvnia," Shaban said in an interview with Ekonomicna Pravda published on Tuesday.
Shaban said the pilot project will help determine whether the e-hryvnia can function effectively as money, meet users' needs, and provide useful programmability. The project will be based on Distributed Ledger Technology (DLT) and will involve real users and payment service providers in an open environment.
Shaban clarified that the e-hryvnia would be the NBU's digital version of the Ukrainian currency. "In essence, it is the same hryvnia, only in digital form. Like physical cash, it represents a liability of the central bank," he stated.
If introduced, the e-hryvnia will be legal tender in Ukraine, existing solely in non-cash form, and will complement both physical and digital money. It would be designed to perform all functions of money and be accessible to all users.
Ukraine seizes $50 million worth of bauxite and alumina from Russian magnate Deripaska
Ukraine has seized UAH 2.11 billion ($50.3 million) worth of raw materials owned by Russian aluminum tycoon Oleg Deripaska, two years after blocking their shipment, the Security Service of Ukraine (SSU) said on Wednesday.
The SSU reported that nearly 500,000 metric tons of bauxite and alumina, stored at the Mykolaiv Alumina Plant, were confiscated. The plant, along with other Deripaska-owned factories, was nationalized by Ukraine following Russia's full-scale invasion.
The ore, which was produced in Ukraine before Russia's full-scale invasion in February 2022, had been meant for export, but Ukrainian authorities "exposed and blocked" plans to ship it out in early 2023, the SSU said in a press release.
The SSU confirmed Deripaska's ownership of the materials through a Europe-based company registered as a customer of the Mykolaiv plant. The agency also said Deripaska's factories are involved in producing components for Russia’s Iskander missiles, combat drones, and radar systems.
A billionaire under Western sanctions, Deripaska is one of the few members of Russia's business elite to publicly criticize the Kremlin's war, although his critiques have primarily focused on economic issues.
South Korea to help rebuild missile-hit children's hospital and veterans' center in Ukraine
The Korea International Cooperation Agency (KOICA), which coordinates aid for the South Korean government, aims to help rebuild and upgrade a missile-damaged children's hospital in Kyiv and a veterans' center, Ukraine's Deputy Minister of Health Edem Adamanov said.
The first project, "Strengthening the Children's Trauma and Rehabilitation Medical Service," will be implemented at the National Children's Specialized Hospital 'Okhmatdyt' in Kyiv over the next three years, Adamanov said via LinkedIn.
The Okhmatdyt project will include reconstruction of the clinic building, equipping the hospital with modern medical equipment, and training for doctors.
The hospital project is one of the higher-profile reconstruction plans in Ukraine since two people were killed and more than 30 injured in the missile strike on the hospital on July 8 last year. All buildings of the hospital were damaged to at least some extent and tens of millions of dollars were raised in donations from around the world to help rebuild it.
After the attack garnered headlines in media around the world, more than 1.6 billion hryvnias ($39 million) was raised in donations from individuals around the world as well as dozens of corporations and the governments of Lithuania and Ukraine.
The second project involves modernizing the Ukrainian State Medical and Social Center for War Veterans in Tsybli, Boryspil District. The modernization will include reconstructing the premises and swimming pools, purchasing rehabilitation equipment, training staff, and monitoring and evaluating the effectiveness of treatments.
"I sincerely thank the people of South Korea for their support and assistance to Ukraine during these difficult times," said Adamanov. "I look forward to continued cooperation and successful implementation of joint projects that will help rebuild our country and create a strong, modern Ukraine."
Finland to fund €2 million environmental damage assessment of Ukrainian water resources
Kyiv's ministry of environmental protection and natural resources and Finland's Environment Institute (SYKE) have allocated €2 million for conducting an environmental damage assessment and monitoring of water quality and biodiversity in Ukraine.
The Finnish Ministry of Foreign Affairs will fund the project, which will run from 2025 to 2028.
The project activities include conducting screening studies of pilot river basins affected by the war, purchasing a mobile laboratory for the Northern Region Water Monitoring Laboratory, and exchange of experience with Finnish experts, the Ukrainian government said in a press release.
It also aims to increase the use of satellite data as a tool for environmental monitoring and, help Ukraine develop water and biodiversity monitoring "roadmaps." It will also audit the data management and reporting system, and synchronise the Ukrainian system with European practices.
"Last year, the Ukrainian water sector was significantly affected by Russian armed aggression," said Svitlana Grynchuk, Ukraine's minister of environmental protection and natural resources.
"In total, over 744 water infrastructure facilities valued at more than UAH 500 million ($11.95 millon) have been either damaged or destroyed in the nearly three years," Grynchuk stated.
The ongoing war in Ukraine has left over 6 million people without access to clean water, highlighting the impact of Russian invasion on the country's already-vulnerable water security, according to a recent study.
UK government names Labour Party MP Sobel as trade envoy to Ukraine
The UK has named MP Alex Sobel, who has served since 2017 as a member of parliament for the Labour Party, as trade envoy to Ukraine, the UK embassy in Kyiv said on Wednesday.
"He will focus on identifying trade and investment opportunities for British businesses and promoting the UK as a destination of choice for investment," the embassy said in a post on X.
Commenting on the appointment in a post on Instagram, Sobel wrote: "The UK has just signed the historic 100 year partnership with Ukraine and trade is a key plank of the agreement. I look forward to playing my part in delivering for both UK and Ukraine."
On Jan 16, British Prime Minister Keir Starmer and Ukrainian President Volodymyr Zelensky signed the 100-year partnership agreement to deepen cooperation between the two countries in defense, economy, education, science, technology, and other areas.
The deal includes a commitment by the UK to provide Ukraine with GBP 40 million to support the country's economy, "unlocking millions in private lending to increase growth and trade," the UK Foreign, Commonwealth and Development Office said at the time.
The UK government says on its website that the trade envoys "engage with their respective markets where substantial trade and investment opportunities have been identified."
Before becoming a member of Parliament, Sobel worked for five years as the lead for the city of Leeds on climate change and climate change projects, according to his LinkedIn page.
CSIS: Trump's coercive diplomacy alone won't secure lasting peace in Ukraine
US President Donald Trump's strategy to end the war in Ukraine relies on coercive diplomacy—mixing pressure and incentives—but without clear ultimatums and trust between Russia, Ukraine, and the West, securing meaningful negotiations will be difficult, Sean Monaghan, a visiting fellow in the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS) wrote in an op-ed.
While Trump's unpredictability could create an opening, success will depend on a careful balance of threats, concessions, and incremental steps to build confidence, Monaghan wrote, adding that if Trump rushes a deal for political gain, he risks either failing to end the war or undermining Ukraine's long-term security.
Scott Ritter: Trump's Ukraine peace plan is unrealistic and could backfire
Donald Trump’s proposed approach to resolving the war in Ukraine — offering Russia a deal that includes delaying Ukraine’s NATO membership while threatening severe sanctions if negotiations fail — is unrealistic and unlikely to succeed, former US Marine Corps intelligence officer Scott Ritter wrote in an op-ed published by Consortium News.
Newsweek: Trump's shift on Ukraine signals strategic break from Putin
Donald Trump's shift on Russia and Ukraine reflects his pragmatic leadership style—favoring strategic advantage over ideological consistency. Sensing Putin's weakness and Ukraine’s resilience, he now distances himself from Russia, positioning himself as a potential broker for Ukraine's victory while leveraging China as a counterweight, Jeffrey Sonnenfeld, the CEO of the Yale Chief Executive Leadership Institute, and Steven Tian, the research director of the institute, wrote in an op-ed for Newsweek.
This reversal follows Trump’s pattern of avoiding "losers" and using divide-and-conquer tactics to maximize his influence, according to the authors. Whether this shift is a genuine recalibration or a tactical move remains unclear, but it underscores his instinct to adapt when the balance of power shifts, Sonnenfeld and Tian wrote.
Use of state e-services in Ukraine has declined but remains strong, UNDP study finds
The use of state electronic services in Ukraine remains high but has declined over the past year, according to a study by the United Nations Development Programme (UNDP) .
A survey by the Kyiv International Institute of Sociology for the UNDP found that 55% of respondents reported using at least one state electronic service in the past year, a decrease from 64% in 2023.
The most commonly used service was the Diia application, used by 42% of respondents, down from 51% in 2023. Other frequently used services included vehicle-related transactions (15%), obtaining information from state registers (13%), pension services (10%), and taxation services (9%).
The survey of 2,019 adults found that younger individuals, men, urban residents, and those with higher education and income were more likely to use electronic services.
Among vulnerable populations the highest usage rates were found among veterans (79%) and parents of children with disabilities (76%), followed by internally displaced persons (IDPs) at 68%. Only 26% of older people reported engagement.
The primary reason cited for not using state electronic services was the lack of necessity (67%), distrust of electronic services (26%), and lack of awareness of available services (25%).
The share of respondents reporting inadequate digital skills as the primary reason increased from 27% in 2023 to 44% in 2024. Some 44% expressed interest in learning them, while 32% said they preferred learning with assistance from children or grandchildren.
Diiawas most often used to obtain salary certificates (27%), followed by pension certificates (7%) and registration of IDP status (6%). The use of IDP-related services declined significantly compared to 2023.
The most common concerns were the need for clearer instructions, better design, and accessibility enhancements. Only 10% of respondents described their experience as "rather negative" or "very negative".
Social Media Posts
Analysis of Ukraine Agri-Market
The Ukrainian Agribusiness Club Association (UCAB), jointly with the Ministry of Agrarian Policy and Food of Ukraine, presented on social media an analysis of the 2024 Ukrainian agricultural market.
The study "systematizes information that will help our international and European partners to better understand the structure and volumes of the Ukrainian agribusiness sector debunking myths that Ukraine can 'overfill' international markets, in particular the EU," according to the post.
Key Players in Defense Tech
TechUkraine, an tech industry group coordinated by the government and private sector firms, published a social media post very briefly describing the key players in Ukraine's defense tech sector.
The players include Darkstar Camp, from Estonia, Green Flag Ventures, MITS Capital and u.ventures from the US, Angel One Venture Fund from Ukraine and TZR Capital, from Germany, according to TechUkraine.
Mineral Development Law
Nataliia Khmelovska, an energy sector attorney with Ukrainian law firm Sayenko Kharenko, published an overview of the Ukrainian law that took effect on Jan 17 amending the Subsoil Code and the National Program for the Development of the Mineral Resources Base of Ukraine for the period up to 2030.
"The amendments to the Subsoil Code of Ukraine, in particular, relate to the clarification of the categories of minerals that may be recognized as strategic or critical for the state," she wrote.
Balancing Market Explained
Maksym Maksymenko, head of real estate and infrastructure at Ukrainian law firm Avellum, published another brief article in his continuing series of social media posts explaining Ukraine's electricity submarkets.
The latest post covers the balancing market, the final stage of electricity trading, where "the TSO, with the help of balancing service providers, maintains the delicate balance between supply and demand. Balancing service providers submit proposals to the TSO to increase/decrease its load/consumption by a specified amount at a specified time."
How to Bid in Ukrenergo Tender
Ukrainian law firm Integrites promoted a new article explaining how to submit a bid in the call for bids by NPC Ukrenergo, the state electric power transmission operator, for the development of load-following power plants with 700 MW in aggregate capacity.
The article also covers technical requirements to bid in the two auction lots, including the 500 MW first lot to be developed in top-priority areas of the country and 200 MW in second-priority regions.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
