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

Explicit Guidance:

• No financial guidance (revenue, earnings, margins, capex, etc.) provided for the company or the broader Ukrainian economy.
• No specific numerical targets for growth, investment volume, or fiscal periods (e.g., FY2026/2027) issued by management.

Business-Segment Outlook:

• Investment Agreements: Domestic investment agreements signed reached ~500 in 2025; increased to >800 in the first seven months of 2026, but a "drastic change" occurred in August 2026 where most non-finalized investors declared a pause or stop in investments.
• Production Recovery: In the 12 months following management shift (post-June 2025), production at the UMCC titanium asset increased to 37,000 tons, requiring >$35 million in additional operational investment for reconstruction.
• Sector Focus: Investors are targeting "economic infrastructure" (energy production, transport, digital assets like fiber/towers) and greenfield projects (>70% of future mandate), rather than labor-intensive growth strategies.
• Privatization: The State Property Fund prepared five large-scale privatization objects during martial law; however, major auctions for Odessa Port and Sumy Chemical are currently suspended due to security/geopolitical risks.

Market and Competitive Outlook:

• Investment Attractiveness: Market is described as having "unavoidable attractiveness" due to size, resources, and talent, but currently hampered by security risks, corruption, and regulatory hurdles. Small privatization assets are viewed as attractive to domestic buyers; large assets attract no interest or only select foreign entities based on location and security.
• Regulatory Efficiency: The Anti-Monopoly Committee aims to further reduce Phase 2 consideration duration (already reduced 2.5x since 2023) and plans to implement a "special track" for large businesses to streamline applications, aiming to eliminate application deficiencies by November 2026.
• Competition: Recent data shows a bounce-back in returned M&A applications to 17% in the first nine months of 2026 (down from 46.5% in 2023), though the committee warns of a negative trend in application quality requiring immediate attention.

Macro / Industry Outlook:

• Fiscal/Financial Constraints: The banking sector faces capital constraints due to a 50% tax rate on banks (up from 25%), hindering capital accumulation and the ability to fund large-scale deals (e.g., the $3 billion syndicate deal for DTAC was commercial but took six months).
• Liquidity vs. Capital: While liquidity exists for syndicated deals (record $370 million deal completed, $3 billion attempted with state guarantees), the "missing" element is capital depth; the Ukrainian banking system is currently 1/10th the size of the Polish system.
• Regulatory Environment: Government is seen as "more predictable" due to fulfilled obligations, but sudden regulatory changes (e.g., energy caps last spring) create uncertainty.
• Security/Government: Investment flows are "dominating" but driven by unavoidable necessity; foreign investors require International Financial Institutions (IFIs) for risk-sharing to deem projects bankable.

Strategic Initiatives:

• M&A Process Reform: The Anti-Monopoly Committee will publish specific algorithms and criteria for large M&A applications by late 2026 to ensure higher document quality and faster processing.
• Risk Mitigation: Investors and government are exploring mechanisms like government-backed guarantees or escrow accounts to bridge gaps between payment and asset transfer (e.g., the 6-month gap in the UMCC deal).
• Privatization: The State Property Fund intends to continue preparing large assets and conducting "open-door days" for stakeholders, but will pause auctions for high-risk zones near contact lines until security stabilizes.

Risks and Headwinds to Outlook:

• Security: Martial law and proximity to contact lines (e.g., Sumy, Odessa) are primary causes for investment suspension or auction delays.
• Documentation Quality: A significant headwind is the high rate of poorly prepared M&A applications, leading to rejections and prolonged processing times.
• Regulatory Volatility: Sudden changes in regulations (e.g., energy caps, permitting) send negative signals to investors, reducing bankability.
• Geopolitics: The security situation and geopolitical factors (e.g., post-election timing) are causing foreign investors to delay decisions (e.g., the five NDAs for Odessa Port resulted in zero bids).
• Capital Constraints: High bank taxes and limited domestic capital depth restrict the financial system's ability to support large privatization deals.

Management Tone on the Future:

• Confidence: Mixed. Optimistic regarding long-term potential ("prospects," "moving in the right direction," "attractive under pressure") but cautious regarding immediate execution due to "unavoidable attractiveness" and current security constraints.
• Hedges: Repeated emphasis on the necessity of IFI involvement and the need for international standards to mitigate war risks.
• Change vs. Prior: Acknowledges a recent "drastic" reversal in investment activity in August 2026, contrasting with the earlier surge in agreements.

Miscellaneous:

• Timeline Specifics: Key dates mentioned include payment for UMCC in November 2024, asset control in June 2025, permission granted by Anti-Monopoly Committee on May 25, 2025, and a planned meeting with businesses in November 2026.
• Asset Values: $10 billion public investment announced for Ukraine's recovery; $39 billion in assets managed by Amber Infrastructure; $35 million invested in UMCC recovery; $150 million DFC deal cited as an example of risk-sharing.
• Terminology: Use of "unavoidable attractiveness" to describe the nature of current investment flows under pressure.