The Fast Track to Investment at KIEF 2026 - KYIVSTAR GROUP LTD

Financial Performance:

• No specific corporate revenue, earnings, or margin figures were provided as the transcript is a policy and investment panel, not a corporate earnings call.
• Public investment commitments mentioned: $10 billion (Prime Minister level).
• Private investment metrics: 500 agreements signed by 2025; over 800 agreements in first 7 months of 2026 (before August market shift).
• Asset transaction value: $4 billion Ukrainian hryvna paid for UMCC (Titanium) in November 2024.
• Banking liquidity: Sufficient liquid assets available; record syndicated loan of $3 billion during war; a $20 billion deal stalled due to lack of state final decision.
• Banking capital constraints: Banking system is 1/10th the size of Poland's; 50% bank tax rate over four years hinders capital accumulation.

Guidance and Future Outlook:

• Investment climate outlook: "Unavoidable attractiveness" driven by necessity, but immediate large-scale foreign interest is currently suppressed by security risks and bureaucratic hurdles.
• Private sector engagement: Expectations for reduced corruption, deregulation, and improved war risk insurance to catalyze private investment.
• Privatization timeline: Large-scale privatization (e.g., UMCC) is proceeding despite martial law; however, new large auctions (Odessa Port, Sumy Chemical) are paused due to security/geopolitical factors.
• Regulatory efficiency: Anti-Monopoly Committee aims to reduce Phase 2 consideration time by 2.5x since 2023; plans to create a "special track" for large business applications to minimize deficiencies.

Business Segments and Product Lines:

• Infrastructure Focus: International investors (e.g., Amber Dragon) targeting economic infrastructure: energy production, transport (ports, sports), and digital assets (fiber networks, towers).
• M&A Activity: Nexol Holding acquired 100% of UMCC (Titanium ore); production increased from 37,000 tons to higher levels over the last 12 months with >$35 million in operational reinvestment.
• Greenfield vs. M&A: Strategic shift proposed by international funds to focus >70% on greenfield projects (new builds) rather than acquisitions, requiring local partnerships for land and permitting.
• Asset Readiness: State Property Fund notes preparation time varies from 6 months to years depending on asset history, legal cleanliness, and security status.

Market and Competitive Landscape:

• Market Attractiveness: Mixed sentiment; investors cite size, resources, and talent as positives, but "unavoidable" investment is often limited to domestic demand or non-avoidable recovery efforts.
• Competition: High competition for well-prepared assets; however, many projects fail to reach "bankable" status due to poor documentation or due diligence.
• Regional Comparison: Ukraine viewed as having potential similar to neighboring "Three Seas" countries, but historically struggles with corruption and administrative hurdles.
• Regulatory Environment: Perception of improvement in transparency, but inconsistent regulatory changes (e.g., sudden energy cap changes) create investor uncertainty.

Risks and Challenges:

• Security and Geopolitics: Martial law and proximity to conflict lines (e.g., Sumy) are primary reasons for investment suspension or auction cancellations.
• Bureaucratic Inefficiency: High rate of returned applications (17% in first 9 months of 2026) due to poor document quality; lengthy transfer of control (6 months from payment to takeover at UMCC).
• Corruption and Justice: Identified by business council as a critical barrier; need for adequate judicial access to protect property rights.
• Banking Capital Constraints: High tax rates and small system size limit ability to fund large M&A or infrastructure deals without international guarantees.

Management Commentary and Tone:

• Tone: Cautiously optimistic; acknowledges severe wartime constraints but emphasizes active government efforts to streamline processes and improve transparency.
• Government Stance: Focus on three pillars: deregulation, war risk insurance, and HR management; commitment to "unbundling" procedures and engaging in constructive dialogue.
• Regulator Confidence: Anti-Monopoly Committee highlights significant process improvements and lower rejection rates (down from 46.5% in 2023 to 13.8% in 2025) as evidence of reform success.

Analyst Questions and Answers:

• Q: How to incentivize investors during the gap between payment and asset takeover? A: Theoretically possible via escrow accounts, but practically untested; banking sector requires clear commercial terms and guarantees.
• Q: What are the bottlenecks in the Anti-Monopoly Committee process? A: Quality of submitted applications; many return due to lack of clarity on control relations or elementary errors.
• Q: Can Ukrainian banks fund large deals quickly? A: Liquidity exists (syndicated deals completed in 3 months with guarantees), but capital adequacy and high taxes limit capacity for commercial deals without external support.
• Q: What is required to make projects bankable for international funds? A: Full technical, legal, and financial due diligence; avoidance of regulatory "hiccups"; and presence of International Financial Institutions (IFIs) for risk sharing.

Other Key Points:

• UMCC Deal Precedent: The sale of UMCC demonstrated that large-scale privatization is feasible during martial law, with the state property fund successfully engaging stakeholders via open-door days.
• International Support: Critical role of IFIs (e.g., DFC, EU funds) in de-risking investments; examples include a $150M Vodafone deal and the EU flagship fund.
• Future Reforms: Proposed creation of a dedicated engagement track for large businesses with the Anti-Monopoly Committee to pre-empt application deficiencies and speed up approvals.
• Investment Strategy Shift: Recommendation to prioritize greenfield projects for international investors to avoid legacy legal/technical issues associated with acquired state assets.