Ukrainian Railway gets supervisory board

Ukraine’s Cabinet of Ministers appointed seven members
to the supervisory board of Ukrainian Railway (RAILUA) on June 20, consisting
of four independent board members and three members representing the
government. The board was appointed based on the Cabinet’s regulation approved
on March 2018 that was designed for the largest state-controlled companies.

The supervisory board’s formation enables the approval
of decisions that are vital for the company’s further development, according to
a Ukrainian Railway press release on the same day. Among these decisions are
approval of the management board and CEO, efficient use of the company’s money
and non-core assets, as well as the appraisal of its assets.

Alexander Paraschiy: This is an
important development for the company, which has had an acting CEO for more
than 10 months and has not been able to approve any important decision related
to raising debt or selling non-core assets without the supervisory board.
Hopefully, the new board will help to resolve such outstanding issues, making
the company more flexible in its policy of financial management and efficient
allocation of assets. Also, the expected approval of a full-pledged CEO and top
management should add more confidence to investors in fulfilling Ukrainian
Railway’s mid-term plans. That said, we retain our neutral view on RAILUA
bonds.