Kernel Showing Interest in Olvia Concession

30 Сен

The world’s largest manufacturer and exporter of sunflower oil can take part in the bidding for Olvia port public stevedore concession.

In the framework of the state assets concession project preparation, the specialised port Olvia was visited by representatives of the company Kernel. The purpose of the visit was assessment of production capacities and state of port infrastructure objects to be concessioned, by a potential investor.

It was specified that the delegates of Kernel headed by the company’s DG Ievhen Osypov in the course of meeting with Head of local USPA Branch Andrey Yegorov and Director of SE Stevedoring Company Olvia Ruslan Oliynyk got familiarised in detail with the tender conditions and inspected yards and assets of the public stevedore planned for concession.

Let’s note that in 19 September Port Olvia was attended by representatives of a Turkish company Aras who were interested in the object of concession as well.

According to the requirements of tender documentation, in the first three years the investor of Olvia Port is to erect a new grain terminal capable of 2M t a year, having invested $49M (excluding VAT).

The concession’s term is 35 years (2019-2053), the concession fee consisting of two parts: the fixed fee (as the average amount of dividends paid by Olvia to the state in 2015-2017 i.e. 78.8M UAH or 3M USD), and the variable (at least 0.73% of the concessionaire’s income).

The feasibility study designers (Castalia, EY, MTBS Ukraine etc.) have calculated the port’s expected cargo flow till 2030. In terms of their data, under the pessimistic scenario the cargo flow would amount to a trifle over 2M t, while under the neutral one – 6M t. as for the optimistic scenario, in that case the port’s cargo base is going to grow up to 30M t by 2030.

Let’s remind that on 12 September Ministry of Infrastructure of Ukraine announced the start of concession tender procedures for the ports Olvia and Kherson public assets.

On 01 October MIU will present to potential investors both projects in Odessa focusing on the tender provisions and procedures.

Meanwhile Warsaw Stock Exchange has reported on Kernel signing the agreement to change and review its pre-export credit line by 02 February 2018 with the European banks syndicate and EBRD.

As mentioned, the available limit of the changed credit line was increased up to $300M by the $200M additional tranche with the payback period due on 30 June 2021. Moreover, the actual $100M tranche’s payback period was prolonged by one year till 30 June 2022.

Simultaneously the Black Sea Trade and Development Bank (BSTDB) reported on its decision to allocate up to $15M to Kernel Group within the syndicated credit for pre-export funding. The bank further specified: “BSTDB credit will be used to finance Kernel’s purchases of sunflower seeds in Ukraine, their initial processing, storage and transportation, as well as subsequent export to other countries.” It’s also specified that the BSTDB funding is a part of the credit of $390M granted by a group of international commercial banks.

Lately Kernel’s founder Andrii Verevsky enlightened the group’s financial results: “We achieved $346M of EBITDA (growth by 55% comparing to 2018 FY), and $189M of net profit falling at shareholders of Kernel Holding S.A., having improved our proof balance position with the net debt to EBITDA ratio at 2.0 level as of 30 June 2019. To compare with the previous year, Ukraine harvested 15.2M t of sunflower seeds which is by 13% higher of the same period of the previous year.” The company’s proceeds for 2019 FY boosted by 66% i.e. to $3.99Bn, and the net profit margin grew from 2.2% up to 4.7%, while the profit per share enlarged 3.6 times up to $2.31.

Besides, in February 2019 Kernel acquired for $64M the company Rail Transit Cargo Ukraina owning almost 3,000 railcars which will enable to push down the logistic expenditures.