Kolomoyskyi: Time to collect bonuses

Early parliamentary election has significantly changed the political situation in the country. This will inevitably affect the business of the largest financial and industrial groups – since influence of one or another oligarch stands behind almost any significant political force.

The greatest advantages are received by co-owner of the Privat group Ihor Kolomoyskyi.

He traditionally refutes financing of any political force – but at the same time, he does not hide his sympathies for Servant of the People and Batkivshchyna, which collected 43.17% and 8.18% respectively according to the party lists. The "eggs" laid out by him in the "baskets" of Opposition Bloc and other losers will also not disappear, becoming the basis of influence on their few members elected by the first-past-the-post system.

Almost universal victory of the representatives of Servant of the People in single-mandate districts allow the political force of Volodymyr Zelensky to form the entire power vertical.

There is no need to share anymore - starting with ministerial portfolios and ending with directors' chairs in large state-owned companies. Therefore, Privat can expect a pleasant change in the near future.

Battle for the shelf and cheap kilowatts

First of all, it is about postponing the start of work of new model of the electricity market (until 1 year, and you can extend the delay from year to year, as is done with the moratorium on the purchase and sale of agricultural land).

The new model of the energy market has been operating since July 1 in accordance with decisions taken during the presidency of P.Poroshenko and has led to a significant increase in the price of electricity for industrial enterprises.

This is a serious blow to the Privat ferroalloy plants in Zaporizhia and Nikopol, as well as the Zaporizhia Dniprospetsstal plant. These enterprises use electric arc furnaces, so the cost of electricity is the main component in the cost of production. Now their costs have risen sharply. So, the owner's profit has decreased.

According to the industry representatives, the rise in price of electricity is largely due to the tariffs of NPC Ukrenergo, operator of trunk transmission lines.

Therefore on July 1, the Kyiv District Administrative Court suspended the decision of the National Energy Regulatory Commission (NERC) of June 7, 2019, which established tariffs for Ukrenergo for the second half of the year. The decision was made at the suit of the Nikopol Ferroalloy Plant.

Now, most likely, the issue of tariffs will be resolved even without the participation of the court - after the appointment of new staff of the NERC and director general of Ukrenergo. In this case, it will not be necessary to postpone the start of work of the new model of the electricity market – since this may not be supported by Western partners of Ukraine.

Another option to make energy resources cheaper for enterprises under the new conditions is to allow NNEGC Energoatom to sell its electricity to industrial consumers.

This requires the adoption of appropriate resolution of the Cabinet of Ministers of Ukraine (CMU). The Privat group could not expect such a "gift" from V.Groysman. Now the admission of Energoatom to the market of free bilateral contracts with industrial enterprises is just a matter of time.

The same applies to the competition for the right to develop the Dolphin oil and gas field located on the Ukrainian part of the Black Sea shelf.

4 companies, including PJSC Ukrnaftoburinnya, wanted to produce oil and gas at the largest site, 4 companies wanted, including PJSC Ukrnaftoburinnya. The ultimate owners of this PJSC are I.Kolomoyskyi and his business partners – Kharkiv oligarch Pavlo Fuks and former member of the Party of Regions Vitaliy Khomutynnik.

Now the situation with the competition is in limbo. According to its results, the American Trident Black Sea Inc. and Azerbaijani Caspian Drilling International state-owned company scored the same number of points.

That is, I.Kolomoyskyi went out the window. However, the winner is not determined. This supposed to be done at the meeting of the interdepartmental commission at the CMU on July 12 – but it did not take place.

Obviously, a new competition will now be announced and chances of Ukrnaftoburinnya for success are increasing dramatically. As in the tenders of the Ukrainian gas pipeline system operator, PJSC Ukrtransgaz.

Tenders of state-owned companies: who is the new king of the hill?

In 2017-2018, the Ukrtransgaz state-owned company rejected Ukrnaftoburinnya's applications for participation in tender for the supply of gas for it by $90.85 million. The company of I.Kolomoyskyi tried to appeal this decision through the Antimonopoly Committee of Ukraine (AMCU) – but to no avail.

Now everything should change for it. Moreover, the owner of Privat has already indicated a desire to engage in the sale of energy resources for major state corporations.

So, it became known at the end of July that the Kremenchuk LLC Oil Trade 2018, which is associated with I.Kolomoyskyi, submitted a bid for diesel fuel supply to PJSC Ukrzaliznytsia (UZ).

The WOG group (formerly Kontynium-Halychyna) was the main supplier for UZ for a long time. After the death of its main owner, Verkhovna Rada deputy Ihor Yeremeyev, it is managed by his partner, also VR deputy, Stepan Ivakhiv.

S.Ivakhiv retained his mandate in district No.21 (Volyn oblast), but now his group will have to make room even more on the short bench of diesel fuel suppliers for UZ, which annually purchases about 350 thousand tons. At current prices, this is $391.7 million - more than a fat piece of cake.

But already in 2017-2018. WOG's share in total deliveries fell to 17%, and over 50% went to the Trade Commodity group. Which, despite a number of criminal cases in the NABU's production, felt itself quite comfortably during the reign of P.Poroshenko (being the main supplier of diesel fuel for the Ministry of Defence, i.e. for the AFU needs).

WOG and Privat have a long-standing conflict over a place in the sun on the Ukrainian oil products market. Therefore, it is logical to expect that first of all, I.Kolomoyskyi's firms will squeeze out "friends" from the group of S.Ivakhiv as UZ suppliers.

But Trade Commodity will have to move over thoroughly. Since after the departure of P.Poroshenko, this company lost the necessary support.

This version can be confirmed by the July arrest of tanker with oil products for Trade Commodity in the port of Mykolayiv by the State Fiscal Service of Ukraine.

According to the oil traders, fiscal officials did not show interest in the cargo of this company and related firms earlier.

As for the aforementioned UZ tender, it is scheduled for the end of August and will give a final answer to questions about the new role of Privat in public procurement.

According to the media reports, unofficial redistribution of influence has already occurred in the public sector of the coal industry.

Instead of owner of the Ukrdoninvest company Vitaliy Kropachev (who was considered representative of the interests of Ihor Kononenko, long-time friend and business partner of P.Poroshenko), another Donetsk businessman, Vitaliy Beliakov, who had previously become famous for working for the "family" of Yanukovych, allegedly became the new "curator".

According to the media, he acts in the interests of Privat. In particular, he facilitated the replacement of the director general of the PJSC Centrenergo state-owned company, which controls the Trypilska, Zmiyivska and Vuhlehirska thermal power plants.

After the appointment of Volodymyr Potapenko instead of Oleh Kozemko (who was believed to work for V.Kropachev) on July 1, Centrenergo began supplying cheaper electric power for enterprises from the Privat orbit: the Nikopol and Zaporizhia ferroalloy plants, Marhanets mining and processing works and DniproAzot association.

Privat also won from the new anti-Russian sanctions imposed by the CMU on July 17. These are special duties for the supply of diesel fuel and liquefied automobile gas to Ukraine from Russia.

It is curious that the duties were introduced exclusively for the import of diesel fuel by pipeline transport. That is, we are talking about deliveries through the Samara-Western Direction product pipeline.

Companies that are associated with former head of the presidential administration Viktor Medvedchuk are its recipient. He is unofficially considered the main importer of Russian gas.

Whereas deliveries of the same Russian diesel fuel (DF) by rail or road tanks are for some reason not subject to duties.

The duties themselves are symbolic: from August 1 - 3.75% for DT and 1.75% for gas. Further, from October 1, they will increase to 4% for DT and up to 3% for gas. It is clear with the naked eye that the size of the duties is not barrage. But it will lead to a slight rise in price of the Russian resource in gas station networks of companies associated with V.Medvedchuk.

Against this background, offers of networks related to Privat will look much more attractive: Ukrnafta, Avias, etc. Accordingly, their sales will increase, while that of competitors will decrease.

Although in the opinion of director of the A-95 consulting group Serhiy Kuyun, such size of duties will not affect the volumes of import deliveries from the Russian Federation in any way.

National Bank is next in line

Among the court decisions in favor of Privat, one should single out the verdict of the Supreme Court of Ukraine (SCU), which put an end to the long-running dispute of the AMCU and a number of enterprises and companies from the orbit of I.Kolomoyskyi.

The story began in 2015 when the AMCU fined PJSC Ukrtatnafta (Kremenchuk Oil Refinery), PJSC Halychyna refining complex (Drohobych Oil Refinery) and a number of trading companies $51.35 million.

The Antimonopoly Committee regarded their joint actions at auctions for the sale of oil and gas condensate as conspiracy. The defaulters did not agree and challenged at the findings of the AMCU in the Commercial Court of Kyiv.

It canceled the fine in August 2017, the AMCU appealed the verdict, and so in 2 years, the investigation reached the AFU, which finally saved I.Kolomoyskyi from paying $51.35 million. However, in 2010-2017, only the lazy did not speak about the concerted actions of the Privat members at auctions that allowed the group to buy oil cheaper than market prices.

Proceedings around the nationalization of Privatbank are not so successful for Privat.

Yes, on July 5, the Pechersk District Court of Kyiv lifted the arrest of 415 real property items owned by LLC Privatofis related to I.Kolomoyskyi.

In another case, on July 22, the Kyiv Court of Appeal refused the National Bank of Ukraine to withdraw the seizure of assets of I.Kolomoyskyi and his companies. But here, the NBU was just trying to remove the arrest – because he could put up these assets for sale to pay off the debt of I.Kolomoyskyi on refinancing loans. So this decision is also in favor of the Privat group.

The failure befell it in another process: on July 2, the SCU did not allow the Dnipropetrovsk LLC Erlan (producer of juice and mineral water TM Biola) to terminate the agreement in which the company acted as guarantor of loans issued by the NBU to Privatbank when it belonged to I.Kolomoyskyi.

It is referred about collateral of $118.5 million. It will continue to be at the disposal of the National Bank – until I.Kolomoiskyi and his Privat partners decide to repay the debt.

In addition, on July 11, the Dnipropetrovsk Economic Court opened proceedings in the case of recovery of $192 million from I.Kolomoyskyi in favor of the NBU.

Earlier, the same court refused to consider the NBU lawsuit, since the oligarch resides in Geneva. However, the lawyers of the National Bank eventually managed to prove that this is not reason for the refusal.

The SCU confirmed their point of view in March and ordered the Dnipropetrovsk economic court to consider the NBU's claims against I.Kolomoyskyi under 4 guarantee contracts for refinancing loans.

In this regard, it seems that this process will not result in complete and unconditional victory of one of the parties.

Colossal political weight of the I.Kolomoyskyi's group after the last parliamentary election is on the one scale and pressure from Western lenders of Ukraine and, above all, the International Monetary Fund and World Bank, insisting on the responsibility of the former owners of Privatbank, is on the other.

Vitaliy Krymov, OstroV