The Ministry of Finance placed UAH 135m of hryvnia-denominated “war bonds” at an auction yesterday.

Ukrainian authorities presented a detailed recovery plan for 2022-2032 worth $750bn at the top-level Ukraine Recovery Conference (URC) which was held in Lugano, Switzerland, on Jul. 4-5. The plan includes $60-65bn of immediate funding for 2022, excluding security and defense; $300bn to finance a 3-year recovery phase over 2023-2025; and $400bn for a 7-year modernization phase. The plan assumes that Ukraine’s international partners will provide around two-thirds of total recovery needs in the form of grants, loans and direct investment, with the remaining third to be financed by the private sector. The $60-65bn of immediate funding needs includes $30-35bn of budget support, of which $30bn has already been committed.

Ukrainian Railways (RAILUA) CEO Oleksandr Kamyshin said the company has provisionally agreed with the World Bank on attracting $200m in financing for projects to develop grain export capacity.

Naftogaz issued a statement yesterday, saying that the company is “evaluating its liquidity and operating requirements to preserve its available cash. The company evaluates different alternatives which include its various financial obligations. After the evaluation process is complete, the company will publish an updated statement.”

Russia’s claim about the full capture of the Luhansk region appears to be premature, as Ukrainian forces are still repulsing Russian attacks at Bilohorivka, west of Lysychansk and within the Luhansk province, according to the Ukrainian General Staff’s Wednesday morning sitrep. Elsewhere on the northern Donbas front, on approaches to Slovyansk, Russian forces still failed to manage more than only marginal gains, as illustrated by today’s update from the UK Ministry of Defense: “Over the last week, Russian forces have likely advanced up to another 5 km down the E40 main road from Izyum [shown as black line running next to Slovyansk in map below], in the face of extremely determined Ukrainian resistance.” Still, according to local observers, the threat of Russian forces launching a much more massive offensive on Slovyansk, their next likely target in the battle of Donbas, remains imminent, having only been delayed by successful Ukrainian strikes on multiple Russian ammunition dumps in the area and Ukrainian forces’ continued pressure west of Izyum.

The Finance Ministry reported the central budget’s provisional cash deficit at UAH 141bn ($4.8bn) in June, up from UAH 117bn in May. Central budget revenues stood at UAH 108bn ($3.7bn) last month, in line with May but down 7.2% y-o-y, while spending kept growing on a m-o-m basis and doubled y-o-y to UAH 249bn ($8.5bn).

Ukraine exported 48.5 Mt of grain in the 2021/22 marketing year (MY; July 2021–June 2022), up 8% y-o-y and including 23.5 Mt of corn (+2%), 18.7 Mt of wheat (+13%) and 5.6 Mt of barley (+36%).

The Russian offensive in the northern Donbas apparently did not gain momentum following Ukrainian forces’ gradual withdrawal from Lysychansk completed over the weekend. According to various reports, Russian attacks west of Lysychansk toward Siversk were repulsed yesterday. Likewise, Russian forces likely still made no progress further west in this area, on approaches to Slovyansk, where the frontline has been unchanged for weeks, with Russian media claiming no gains there.

DTEK Energy published 2021 financial results, reporting a 15% y-o-y increase in revenues, to $2.0bn, EBITDA of $399m (+25% y-o-y), for an EBITDA margin of 19.8% (+1.6pp y-o-y), and a net loss of $174m (vs. $715m loss in 2020). The main driver of higher EBITDA was the growth in electricity tariffs (+$258m y-o-y), partially offset by a $116m increase in third-party coal purchases, $50m growth in gas prices, and other factors.

WSE-listed Astarta Holding, Ukraine’s largest sugar producer, attracted a EUR 10.5m ($11m) revolving working capital loan from Raiffeisen Bank Ukraine, a subsidiary of Raiffeisen Bank International, through an unfunded risk-sharing agreement with the EBRD. The share of the risk the EBRD took on totaled EUR 6.3m ($6.6m). The loan will help Astarta secure sufficient financing for the crop farming season.

The European Commission (EC) proposed to carve out a EUR 1.0bn tranche out of its previously announced macro-financial assistance (MFA) package for Ukraine totaling up to EUR 9bn (endorsed by the European Council on Jun. 23-24). It would come in the form of long-term loans on favorable terms, including a 25-year maturity with a 10-year grace period, while the interest will be covered by the EU budget.

The NBU reported a headline current account (C/A) surplus of $0.1bn in May, down sharply from $1.1bn in April and bringing the 5M22 surplus to $3.6bn, up from a small deficit of $57m in 5M21. The financial account gap (incl. IMF financing) stood at $2.1bn in May, in line with April, bringing the 5M22 gap to $9.1bn (vs. $1.0bn deficit in 5M21).

Ukrainian forces pulled back from the Lysychansk pocket over the weekend, the Ukrainian Army General Staff said yesterday, confirming what numerous observers said was already ongoing in the course of last week.

Ukrainian authorities are considering the possibility of debt restructuring, Bloomberg reported, citing anonymous sources. The options reportedly being considered include a solicitation of consent to amend the parameters of outstanding bonds and use of Russia’s frozen assets as collateral. The latter option has unclear legal viability. No decision has been made so far and is not expected until late summer.

WSE-listed Ukrainian agricultural producer IMC hosted an investor conference to discuss its recently published 2021 and 1Q22 results and update on the company’s YTD performance. IMC reported 2021 net sales of $182m (+13% y-o-y), a gain from change in fair value of biological assets (IAS 41) of $113m (+47%), record high EBITDA of $110m (+54%; incl. IFRS 16), and net income of $79m (+148%). Last year’s profitability surge was in line with expectations, reflecting both a bumper grain harvest and strong prices.

Ukraine received a EUR 447m (est. $470m) loan from the World Bank yesterday, part of the Public Expenditures for Administrative Capacity Endurance in Ukraine Project, under which a UK guarantee covered EUR 425m of the disbursement.