Country insight: Ukraine

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22 July 2009

Serious issues need to be resolved for Ukrainian corporates to get back on the road to recovery. In the meantime it is predator territory. Simon Pirani investigates.

This article appears in the July/August print edition of Trade Finance magazine under the headline 'Predator territory'.

Ukrainian borrowers are struggling to restructure billions of dollars’ worth of debt – and there is a very long way to go. The largest corporates are in negotiations with the big European lenders, and the largest banks can access state and IMF support. But the weak are vulnerable to hungry predators with cash. Some have earned opprobrium by opting for bankruptcy; others are tempted by loans from Russian state-owned banks, the only new money on offer.

Steel headaches

The bankers’ biggest headaches are with Ukraine’s major steel producers. Rolled steel output and crude steel output were respectively 34% and 39% down year-on-year in the first five months of 2009, prices have slumped – and the big steelmakers, who entered the crisis loaded with debt, are struggling to repay.

Ukraine’s second-largest producer, the Industrial...

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