Ukraine announces winner of first seaport concession tender

Risoil-Kherson LLC was declared the winner of
concession tender of Kherson Sea Port, according to a Ministry of
Infrastructure Jan. 21 release. The concession agreement will be signed after
receiving permits from the Antimonopoly Committee. According to the tender
results, the winner takes the seaport in concession for 30 years and commits to
investing UAH 300 mln (about USD 12 mln) within 4 years into the seaport and
UAH 18 mln (about USD 0.5mln) in local infrastructure. The company will also
make annual concession payments consisting of UAH 12 mln fixed amount (about
USD 0.74 mln) and an additional 7% of net revenue from concession operations.
Risoil-Kherson LLC is a consortium of Petro Oil and Chemicals LLC (a company of
Georgian origin, according to Ukrainian media) and Swiss-based Risoil S.A.

According to the financial statements, Kherson Sea
Port generated UAH 7 mln EBITDA in 2017 and negative UAH 13.8 mln EBITDA in
1Q18, while its net revenue was UAH 170.3 mln in 2017 and UAH 23.1 mln in 1Q18.

Andriy Perederey: The result of the first concession tender is a positive signal for
Ukraine’s seaport infrastructure. The concession agreements will enable the
upgrade of the state-owned seaport infrastructure and increase its efficiency.
We expect that the concession-based investments will lead to an increase of
cargo shipments through the seaport and its financial results.