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The Buzz in Ukraine: Interview with Mykola Stetsenko of Avellum

The Buzz in Ukraine: Interview with Mykola Stetsenko of Avellum

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There is a “changing season” in Ukraine, says Mykola Stetsenko, Managing Partner at Avellum, who reports an unusual amount of activity to begin the year, in what is normally a quieter period in the market. “I may sound too optimistic — but I am quite positive.”

Stetsenko describes a flow of steady investments in the country, with most funds placed into such areas as IT (particularly software and video game development) and agriculture. The latter is experiencing growth even though the long-awaited land reform remains incomplete, and will probably not happen before the country’s presidential elections in March 2019. “I think we lost time,” he says, “and this is a very political issue.”

Finance is active as well. “Some companies are looking into debt capital market and issuing new Eurobonds,” Stetsenko says. International financial institutions such as the EBRD, the IFC, European banks, and recently OPIC are all active in the Ukrainian market. For example, the EBRD has recently increased its investment to Ukraine by a third. In addition, he notes, many banks are continuing their investments to long-standing clients this year, such as MHP, which will likely prolong sourcing funds for its pre-export facility.

Stetsenko reports that the instability in Eastern Ukraine is increasingly accepted by investors as a predictable factor. In addition, the slowing of the economy in recent years and devaluation of the hrivnya has resulted in a cheap workforce — Stetsenko reports that it’s actually cheaper than Chinese labor at the moment — also stimulating investing activity. This is particularly evident in Western Ukraine, which is reporting significant development and job growth, as a number of companies — particularly several focusing on spare parts production for automobile giants — have recently opened factories there.

Stetsenko acknowledges the relative success of the country’s well-documented judicial reform efforts in the fight against corruption, but he says the extent of the problem may have been overblown. “I think many experts make this mistake, saying that the biggest problem in Ukraine is corruption. I don't think so — I think it’s bureaucracy.” However, Stetsenko believes that the new Privatization law adopted in mid-January of this year will bring transparency to the system, by simplifying the privatization of state enterprises.

 

Ukraine Knowledge Partner

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com

 

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