Ukrzaliznytsia to become a public joint stock company

Ukraine’s government has decided to convert the Ukrainian Administration of Railway Transportation (Ukrzaliznytsia, UZ, RAILUA) from a ministerial division into a public joint stock company, the entity’s website reported on Sept. 28. The announcement referred to a Sept. 2 Cabinet of Ministers resolution that initiates its transformation into PJStC “Ukrainian Railway” with a charter fund of UAH 229.8 bln. All the shares of the company will belong to the Cabinet, which will perform all the responsibilities of the company’s shareholder meetings.

Alexander Paraschiy: This is the first, albeit small, step towards a theoretical IPO of UZ, while at this stage we do not have any illusions that it might happen soon. At the same time, we hope that this move will improve UZ’s accountability to its stakeholders, including the holders of its Eurobonds. In particular, we expect the company will start publishing more regularly its financial statements, as all the other Ukrainian joint stock companies do.

The reform does not change the status of UZ’s Eurobonds, as the new entity should become the legal successor to all the rights and obligations of Ukrzaliznytsia, according to its bond issue prospectus.