Daily monitor

Newly released data indicates that, in 2009, Ukrainian industrial output underwent a decrease of 21.9% YoY compared to the results of 2008. The information also indicated that, in December 2009, industrial output grew by 2.6% MoM relative to November.

The TAS Insurance Group and the TAS Insurance Company have bought stakes of 14.24% and 15.41%, correspondingly, in Dniprovagonmash (a Ukrainian freight railcar producer). The Cyprus-based companies Acvary Limited and Latinaizen Limited have transferred ownership of their respective 24% and 21% stakes. No further details about the transactions have been disclosed.

Azovmash has announced that it has successfully delivered two half-portal machines for scrap loading into converter. The equipment was supplied to the company Novolipetsk Steel. The value of this contract has not yet been publicly disclosed.

Interpipe, a major Ukrainian pipes producer, announced that 74% of holders of Eurobonds (for a total amount of USD 200 mln, maturing in August 2010 and currently trading with YTM 43%) have agreed to support the introduction of a lock-up and support agreement. This implies that the bondholders will not engage in any actions that could potentially invoke a cross-default before February 2, 2010. If the holders accounting for 75%+1 of the bonds eventually agree to the terms, they should receive USD 2.5 for every USD 1000 of bonds held.

Kernel Holding S.A. [KER PW, U/R] has informed that, on January 13, 2010, it entered into an option agreement to acquire a controlling interest in the Allseeds Group, another major Ukrainian producer and exporter of crude and bottled sunflower oil. The Allseeds Group operates two crushing plants with annual capacities to crush 600 thsd tonnes of sunflower seed, grain silos with equal holding capacities, as well as a transhipment and export terminal for vegetable oil. Kernel intends on paying USD 42 mln for the controlling interest. At the moment the due diligence of Allseeds is in process, and Kernel is also waiting for the Antimonopoly Committee of Ukraine to approve the transaction.

The NBU has released its statistics for December 2009, which underline the positive dynamics of the basic indicators in the banking sector. Namely, bank deposits grew by 2.6%, with the deposits of legal entities increasing by 3.8%. In contrast, throughout 2009, they were on the decline. In December, the money supply grew by 3.6% to reach UAH 487.5 bln. All of these facts, taken together, indicate an increase in economic activity in general.

Azovmash – Ukraine’s largest machinery holding, which includes Mariupol Heavy Machinery [MZVM UZ, BUY] and Azovmash [AZGM UZ, SELL] – has reported an output of 853 railcars in December 2009. According to the Company, 653 tanks and 250 gondola cars were produced in December.

Kryukiv Railcar Works [KVBZ UZ, BUY], one of the largest Ukrainian producers of freight railcars and a monopolist in terms of passenger car production, reported that its order book is fully loaded until May 2010.

In 2009, Ukraine’s sugar importers failed to import the total amount of the 260 thsd tonne quota of preferential raw cane sugar imports permitted under the WTO agreement. The volume imported was only 64 thsd tonnes. The importers were the Ukrros Sugar Union [UROS UZ], which imported 16 thsd tonnes, and the Ukrainian Sugar Company, which imported 48 thsd tonnes.