Category: Ukraine

11 June 2021 saw the published form of disclosing the legal entity’s ownership structure approved by Order 163 of the Ministry of Finance of Ukraine dated 19.03.2021 (hereinafter – the Order) pursuant to Law of Ukraine No. 361-ІХ “On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime or Financing of Terrorism and Proliferation of Weapons of Mass Destruction” dated 06.12.2019. New requirements to the disclosure of the legal entity’s ownership structure will apply from 11 July 2021. All legal entities incorporated in Ukraine must submit their ownership structures to the state registrar till 11 October 2021 in compliance with new requirements.

The Order says that the ownership structure shall be made in free form and always contain:

• all persons owning a legal entity, whether directly or indirectly, independently or jointly with the other legal entities
• the stake held by each of the shareholders
• persons who, irrespective of the form of ownership, have a significant influence on the legal entity’s management or activities
• the description and nature of the UBO’s decisive influence on the legal entity’s activities

The schematics of the ownership structure should be filed along with official documents (copies thereof) confirming the title to make a decisive influence on the legal entity’s management or activities.

N.B.! Failure to submit or delayed submission to the state registrar of the legal entity’s UBO details or relevant documents will result in the penalty imposed on the legal entity’s director and amounting to UAH 17,000 – 51,000 (approximately EUR 510 -1,530).

Moreover, the fulfillment of the disclosure obligation will be required to amend the legal entity’s profile in the Unified State Register of Legal Entities, Individual Entrepreneurs and Civic Organizations.

By Illya Tkachuk, Partner, and Vasyl Yurmanovych, Counsel, Integrites

Avellum has advised Interpipe Holdings on a USD 300 million issue of 8.375% guaranteed notes due 2026. Sayenko Kharenko advised the joint lead managers and bookrunners on the deal.

The notes were admitted to listing on the Luxembourg Stock Exchange. Goldman Sachs International and J.P. Morgan were joint lead managers and bookrunners of the Eurobond issue.

According to Avellum, Interpipe is a producer of steel pipes and railway wheels products, based in Ukraine. The company’s products are shipped to over 80 countries worldwide via a network of sales offices located in the key markets of Ukraine, Europe, North America, and the Middle East.

Avellum’s team was led by Senior Partner Glib Bondar with support from Senior Associate Anastasiya Voronova and Associates Oleg Krainskyi, Anna Mykhalova, and Mariana Veremchuk.

Sayenko Kharenko’s team included Partner Nazar Chernyavsky, Counsel Iryna Bakina, Associates Denis Nakonechnyi, Oles Trachuk, Vladyslava Mitsai, Sofiia-Mariia Kuzminska, and Junior Associate Oleksandr Motin.

Marchenko Partners has advised the Western NIS Enterprise Fund on its provision of unspecified loans to Veterano Pizza Mariupol and the AnVita medical center.

The WNISEF is a regional fund that invests in small and medium-sized companies, funded by the U.S. government via the U.S. Agency for International Development. 

According to Marchenko Partners, the loans were provided together with Oschadbank, and granted “within the ‘Affordable Loans for Social Enterprises in Eastern Ukraine’ project.” 

Veterano Pizza is a social enterprise in Ukraine that supports the Donbas war veterans. The enterprise will use the loan for the procurement of necessary equipment for its branch in Mariupol, carrying out maintenance work, and hiring new employees. The AnVita medical center, which is located in Dobropillia, Ukraine, will use the funds for the procurement of medical lab equipment. 

Marchenko Partners’ team included Partner Roman Shulyar, Senior Associate Bogdan Burlaka, and Associate Oleksandr Poznyakov.

Kinstellar has announced it is expanding its Kyiv team with the addition of the former DLA Piper office in Ukraine.

The combined team will be led by a Management Committee consisting of Co-Managing Partners Olena Kuchynska and Margarita Karpenko, formerly the Managing Partner of DLA Piper Ukraine, and Senior Counsel Daniel Bilak.

According to Kinstellar, the resulting team consists of 60 lawyers, including 10 partners.

“We are embarking on this journey with great enthusiasm,” commented Patrik Bolf, Kinstellar Managing Partner. “Joining forces with DLA Piper’s highly regarded practice in Kyiv greatly enhances Kinstellar’s strength, scale, and ability to deliver seamless, exceptional legal advice across all of our core practice areas. Our growth strategy has always focused on attracting and retaining top talent to help our clients meet their business objectives.”

CMS has advised Horizon Capital and Datagroup on the acquisition of the Volia group of companies. Sayenko Kharenko advised Volia on the deal.

The transaction was backed by Datagroup’s majority shareholder, a fund managed by private equity firm Horizon Capital. 

CMS’s team included Partners Graham Conlon, Tetyana Dovgan, and Olga Belyakova, Counsel Kateryna Chechulina, Senior Associates Vitalii Mainarovych, Mariana Saienko, Orest Matviichuk, and Nataliya Nakonechna, Associates Louise Cakar, Khrystyna Korpan, and Mykola Heletiy, and Lawyers Ihor Pavliukov, Denys Hatseniuk, Iryna Kravchenko, and David Cranfield.

Sayenko Kharenko’s team included Partners Alina Plyushch and Vladimir Sayenko, Senior Associates Mykhailo Grynyshyn, Dmitriy Riabikin, Julia Kuyda, Mykhailo Grynyshyn, Oksana Daskaliuk, and Pavlo Kovalchuk, and Associates Yaroslava Chernyshchuk, Zarina Khalimon, Snizhanna Sheshliuk, Tetiana Dyvak, Daria Karlenko, Zarina Khalimon, Sviatoslav Kozak, Mykola Lykhoglyad, and Kostiantyn Zablotskyi.

The Banking & Finance practice of Integrites in Ukraine has had its hands full lately, according to Partner Igor Krasovskiy, mainly thanks to the economic impact of Covid-19, Ukraine’s energy strategy, and the country’s commitments to international financial institutions.

“The economy was impacted negatively by the coronavirus, so a lot of our clients had to opt for restructuring,” Krasovskiy says and adds that he and his team advised both international and local lenders on a number of restructuring deals. “We recently advised a group of foreign lenders on the restructuring of a Ukrainian bank,” he says. “That transaction was very interesting because, for the first time in Ukraine, it entailed the conversion of senior loans into subordinated loans and a so-called capital instrument.” Krasovskiy also lists the restructuring of EBRD and IFC’s loans extended to Globino as another example.

Furthermore, Krasovskiy points to the government’s commitment to divest from the banking sector as another source of work. According to him, the IFC and Ukraine’s Ministry of Finance recently struck a breakthrough deal with regard to state-owned Ukrgasbank. As a part of the deal, the IFC provided a EUR 30 million loan to the bank (as reported by CEE Legal Matters on January 28, 2021) with an option to convert the outstanding loan into shares, which will pave the way for future privatization of Ukrgasbank and other state-owned banks. “That has, in turn, also sparked foreign investors’ interest in the acquisition of Ukrgasbank’s shares,” Krasovskiy says.

In addition, green bonds have also kept Krasovskiy and his team busy. “Ukraine plans to move from traditional to alternative energy sources,” he says and explains that many investors decided to seize the opportunity to tap into the green bonds market. “For instance, we are already advising one of our clients on a green bonds issuance.”

Last, but not least, Ukraine’s burgeoning fintech sector brought more work to the firm, Krasovskiy explains. “New legislation, which will harmonize Ukraine’s payment law with the EU laws, should be adopted shortly,” he says. “The regulation will facilitate online payments, as well as crypto currency use,” he adds. Krasovskiy notes that the expected change has attracted international payment systems and fintech companies to invest in Ukraine. As a result, Integrites is advising on the acquisition of a Ukrainian mid-sized bank by a foreign fintech company, it has helped establish a number of financial companies, and it has been handling a lot of regulatory work.

Krasovskiy expects that, moving forward, more investors will flock to the Ukrainian market, once lockdowns are lifted globally. He believes that, despite Ukraine’s unfavorable country risk, some of that money will be invested in Ukraine thanks to the potentially high returns.

Integrites has advised EuroCape Ukraine I on the commencement of commercial generation of electricity in Phase I of the 500 MW Zaporizhzhia Wind Park.

EuroCape Ukraine I, a subsidiary of Luxembourg-based renewable energy producer LongWing Energy S.C.A., is a Ukrainian producer of renewable energy. In 2019, Integrites helped the company secure financing for the development of the wind park (as reported by CEE Legal Matters on August 1, 2019).

In Phase I, the wind park will operate at the capacity of 98 megawatts at the feed-in tariff set by the National Energy and Utilities Regulatory Commission of Ukraine. When fully operational, the wind park is expected to provide electricity for 780,000 households in Ukraine. 

According to Integrites, the firm “advised Eurocape Ukraine I LLC on all aspects of the project, including structuring, financing, development, construction and operation, including advice on pre-PPA, commissioning, connection to the grid, getting the feed-in tariff and compliance with other regulatory technical requirements.” According to the firm, it “also advised on the transmission and dispatch agreements, as well as the activation of the PPA with the guaranteed buyer.”

The Integrites team included Managing Partner Oleksiy Feliv and Partners Igor Krasovskiy, Illya Tkachuk, and Viktoriya Fomenko.

Baker McKenzie has advised Raiffeisen Bank Aval on its launch of the Fairo digital banking services platform, a mobile application aimed at freelancers and entrepreneurs.

Raiffeisen Bank Aval has more than 2.5 million customers in Ukraine and is part of Austria’s Raiffeisen Bank International AG Group.

The Baker McKenzie team was led by Managing Partner Serhiy Chorny and Senior Associate Maksym Hlotov, and included Counsel Oleksiy Stolyarenko.

Avellum has advised Concorde Capital on its sale of a 72% stake in Zeleny Park LLC to an unidentified buyer.

According to Avellum, Zeleny Park is a container-board manufacturer that operates a plant in Iziaslav, in the Khmelnytskyi region of Ukraine. It manufactures around 200 tons of container-board per day from secondary raw materials.

Concorde Capital is a Ukrainian investment bank that has invested approximately USD 3 billion in Ukrainian companies in the metallurgical, oil & gas, chemical, agricultural, automobile, pharmaceutical, and real estate sectors.

Avellum’s team included Partner Yuriy Nechayev and Associates Maryna Buinytska and Iryna Fonotova.

Belarus’s Revera law firm has opened a permanent office in Ukraine, headed by Associate Alexander Shtrykul.

According to Revera, the new Ukrainian office will focus on business technology sectors, migration matters, management company’s/director’s services, Diia City (a special legal framework for the IT industry), and ongoing corporate consulting matters.

Shtrykul specializes in real estate transactions. According to Revera, “he counsels clients on real estate management, leasing, and relations involving condominiums. Also, Alexander is experienced in legal support for disputes involving real estate and contestation of state registration.” He is a graduate of the Law Department of the Belarusian State Economic University.

“First of all, we are focused on IT business,” commented Revera Managing Partner Dmitry Arkhipenko. “Legal support for companies that have decided to open R&D offices in Ukraine, as well as our supranational expertise in structuring groups of IT companies in an international format, IP disputes, support for M&A transactions under English law. We will glad to assist your business in adjusting to the new market.”