State block of shares in the amount of 100 percent of the authorized capital of the joint stock company “United Mining and Chemical Company”

Description

Name of the privatization object: state block of shares in the amount of 100 percent of the authorized capital of the joint stock company “United Mining and Chemical Company”.

Location:

• legal address: 3, Surikova St., Kyiv, 03035
• mailing address: 35, Zhilyanska St., Kyiv, 01033

USREOU code (ЄДРПОУ): 36716128.

The size of the authorized capital of the Company: UAH 1,944,000,000.00 (one billion nine hundred and forty-four million hryvnias). The nominal value of the share is UAH 1.00.

Offered for sale: a block of shares of UMCC JSC in the amount of 1,944,000,000 shares, which is 100% of the authorized capital of the company.

Business activity: Mining of other non-ferrous metal ores (NACE code: 07.29).

The average number of employees as of March 31, 2024: 4203 people.

Volume and main nomenclature of products (works, services):

#	Name, main nomenclature of products (works, services)	2021		2022		2023		Q1 2024
		Sales volume, tons	Income, UAH thousand	Sales volume, tons	Income, UAH thousand	Sales volume, tons	Income, UAH thousand	Sales volume, tons	Income, UAH thousand
1	Zircon concentrate KCZ	19 251	749 829	5019	333 641	2052	134 511	1928	118 628
2	including export	19 207	747 841	5 012	333 116	2 046	133 953	1 927	118 535
3	Zircon concentrate KCP – 63	3 995	176 829	937	64 585	407	31 149	184	12 773
4	including export	3 989	176 539	935	64 462	406	31 051	184	12 773
5	Zircon concentrate KCP – 45	3574	159 771	1373	95 816	470	41 914	293	21 932
6	including export	2 982	130 529	1 247	86 082	171	13 791	245	17 420
7	Rutile concentrate	39 821	1 527 911	18 952	1 078 900	10 607	673 083	2151	135 454
8	including export	35 038	1 331 049	16 890	941 616	8 994	552 713	2 112	132 334
9	Rutile concentrate KRP – 63	60	2 286	15	786	3	216	0	0
10	including export	60	2 286	15	786	3	216	0	0
11	Rutile concentrate KRP – 45	309	11 726	106	6152	202	13 613	148	10 657
12	including export	309	11 726	106	6 152	202	13 613	148	10 657
13	Ilmenite concentrate	327 095	1 834 546	68 523	661 870	91 461	969 509	17853	194 850
14	including export	278 580	1 570 922	62 984	608 354	86 286	911 346	17 764	193 789
15	Kysthene-silimanite concentrate KDSZ	3 570	17 704	1361	9 718	1178	11 379	425	4 130
16	including export	2 679	12 834	1 224	8 454	850	8 289	261	2 586
17	Kysthene-silimanite concentrate KDSP	3 231	19 822	978	10 075	954	11 948	186	2 336
18	including export	1 831	10 965	772	7 813	748	9 408	88	1 136
19	Kysthene-silimanite concentrate KDSP-K	0	0	0	0	215	2559	61	758
20	including export	0	0	0	0	199	2 365	61	758
21	Staurolite concentrate	25 452	57 662	8 046	30 796	3 108	17 189	1738	9 247
22	including export	17 444	37 222	7 421	28 250	2 358	12 249	1 340	6 732
23	Sands	95 148	13 901	95 848	27 412	99 065	27 911	13 914	4 326
24	including export	0	0	0	0	0	0	0	0

The main financial indicators:

#	Indicators (thousand UAH)	2021	2022	2023	1 quarter 2024
1.	Assets	4 389 792	4 604 284	3 899 358	3 811 779
1.1	Fixed assets	1 177 421	982 907	813 810	794 373
1.2	Current assets	2 773 313	3 215 929	2 674 383	2 626 188
2.	Equity	2 657 210	2 748 280	2 239 926	2 267 015
3.	Total income, including:	4 684 070	2 761 811	2 269 791	729 207
3.1	Net income from sales of products (goods, works, services)	4 589 216	2 300 026	1 946 679	516 570
4.	Total costs, including:	4 270 267	2 748 446	2 751 141	699 195
4.1	Cost of goods sold (goods, works, services)	3 107 125	1 681 616	1 507 775	451 777
4.2	Administrative costs	377 527	280 969	254 562	61 457
4.4	Other operating costs	374 487	337 386	458 378	73 815
4.6	Income tax expenses	87 300	12 127	-22 748	27 411
5.	Net profit (loss)	413 803	13 365	-481 350	30 012
	EBITDA	23 656.8	9 849.4	-2 167.0	2 172.8
	EBITDA margin, %	14.0	15.7	-62.1	16.5
	Net profit margin, %	9.0	0.6	-107.4	5.8

As of March 31, 2024, at UMCC JSC:

• there are no arrears of wages or debt to the budget;
• overdue accounts payable – UAH 609,331.0 thousand.

Real estate objects  data (buildings, structures, non-residential premises): UMCC JSC owns real estate objects (building complexes, buildings, structures) with a total area of ​​332,692.7 m² (VMMP branch of UMCC JSC – 251,780.7 m², IMPP branch of UMCC JSC – 80,912.0 m²), including:

• industrial buildings with an area of ​​232,597.8 m² (VMMP branch of UMCC JSC – 160,908.7 m², IMPP branch of UMCC JSC – 71,689.1 m²);
• administrative and auxiliary buildings with an area of ​​21,998.8 m² (VMMP branch of UMCC JSC – 19,668.4 m², IMPP branch of UMCC JSC – 2,330.4 m²);
• buildings for social and domestic purposes, with an area of ​​21,049.9 m² (VMMP branch of UMCC JSC – 15,361.2 m², IMPP branch of UMCC JSC – 5,688.7 m²);
• other buildings with an area of ​​57,046.2 m² (VMMP branch of UMCC JSC – 55,842.4 m², IMPP branch of UMCC JSC – 1,203.8 m²).

Information on land plots: 102 registered land plots with a total area of ​​3,333.1987 hectares, including:

• 53 registered land plots with a total area of ​​1,398.8235 hectares of the IMPP branch;
• 49 registered land plots with a total area of ​​1,934.3752 hectares of the VMMP branch.

Information on lease agreements concluded for the facility or its part: there are no concluded lease agreements for real estate of UMCC JSC, which are recorded on the company’s balance sheet.

Information on the presence on the balance sheet of the company of objects that are not subject to privatization: UMCC JSC uses state-owned real estate (buildings, structures) (property not included in the authorized capital of UMCC JSC) with a total area of ​​16,278.0 m² (VMMP branch of UMCC JSC – 12,964.6 m², IMPP branch of UMCC JSC  – 3,313.4 m²).

List of available mineral deposits:

• Mezhyrichne mineral deposit (Osinova, Bukinska and Yurska sites): special permit for subsoil use #6027 of February 11, 2015 (location: Zhytomyr Oblast, Zhytomyr and Korosten Rayons);
• Selyshchanska site: special permit for subsoil use #5269 of August 27, 2021 (location: Zhytomyr Oblast, Korosten Rayon).
• Malyshevske mineral deposit (Western, Central and Eastern sites): special permit for subsoil use #6028 of February 20, 2015 (location: Dnipropetrovsk Oblast, Kamiansky Rayon).

Reserves (as of January 01, 2024):

Ilmenite: 3.857k tons, rutile: 194k tons, zircon: 96k tons.

Volumes of emissions and discharges of pollutants into the environment, waste generation and disposal, information on the payment of environmental fees and charges for 2023 – Q1 2024:

• Emissions and discharges of pollutants, in fact – 12,976.322 tons;
• Waste generation, in fact – 3,294.887 tons;
• Environmental fees and charges paid – UAH 1,413.90 thousand.

Mobilization tasks (orders): UMCC JSC has established mobilization tasks (orders).

Privatization conditions:

The buyer of the block of shares is obliged from the date of transfer of ownership of the acquired block of shares to ensure:

• preservation of the main types of activity of UMCC JSC;
• implementation of investments in the form of capital investments in technical re-equipment and modernization (including energy modernization) of production in the total amount of at least UAH 400 million. From the date of transfer of ownership of the acquired block of shares and until the total amount of investments is reached, the amount of investments annually must be at least UAH 50 million;
• fulfillment of mobilization tasks established for the company;
• payment (if any) within six months from the date of transfer of ownership of the acquired block of shares of debts on wages and to the budget, which exist on the date of transfer of ownership of the acquired block of shares;
• repayment of overdue accounts payable of the company existing on the date of transfer of ownership of the acquired block of shares, except for debt to individuals and legal entities to which special economic and other restrictive measures (sanctions) have been applied in accordance with the Law of Ukraine “On Sanctions” and persons related to them, as well as creditors whose beneficiaries are citizens/residents of the Russian Federation and/or the Republic of Belarus;
• prevention of formation of overdue accounts payable on wages and to the budget;
• prevention of occurrence of tax debt;
• social guarantees for employees in accordance with the requirements of labor legislation;
• prevention of dismissal of employees of the privatized company on the initiative of the new owner or the body authorized by him within six months from the date of transfer of ownership of the acquired block of shares;
• implementation of current collective agreements and conclusion of a new collective agreement (several) for subsequent periods after the end of the current one, as well as employment of laid-off employees of the company in accordance with the legislation;
• compliance with the requirements and additional restrictions of environmental legislation;
• implementation of measures for the reclamation of disturbed lands in accordance with the requirements of the legislation;
• compliance with the level of air pollution in accordance with the emission permits valid in the company, making appropriate changes to the emission permits (if necessary);
• compliance with the limit of pollutant discharge in accordance with the requirements of water legislation;
• management of generated waste in accordance with the norms of legislation and in the manner and timeframes established by legislation;
• development of a project for the conservation and reclamation of the sludge pond in the Morhunka gully and its implementation in accordance with the plans of the company;
• reconstruction of the existing sewage treatment facilities of the Vilnohorsk Mining and Metallurgical Plant branch during 2025-2027;
• proper maintenance and storage of state property, which during the creation of the company was not included in its authorized capital, but remained on its balance sheet;
• maintenance of civil defense protective structures in readiness for use for their intended purpose at the expense of the company’s own funds;
• provision on a permanent basis of services for the transfer of surface water from the water intake of the dam reservoir on the Irsha River to public utility enterprises – consumers of the settlements of Irshansk, Nova Borova and other urban-type settlements in the area of ​​the company’s activities, to which such supply is carried out on the date of transfer of ownership of the acquired block of shares;
• provision on a permanent basis of services for the supply of drinking and industrial water to public utility and other consumers of Vilnohorsk, Verkhnyodniprovsk and other settlements in the area of ​​the company’s activities, to which such supply is carried out on the date of transfer of ownership of the acquired block of shares;
• within 45 calendar days from the date of transfer of ownership of the acquired block of shares, reimbursement by the State Property Fund of expenses for payment of the services of an adviser – BDO Corporate Finance LLC, attracted on the basis of an agreement on the provision of advisor services for preparation for privatization and sale of 100 percent of the shares of United Mining and Chemical Company Joint-Stock Company dated September 3, 2018 No. 224 and in accordance with the Order of the Cabinet of Ministers of Ukraine dated September 25, 2019 No. 883 “On determining an adviser to provide services for preparation for privatization and sale of a block of shares of United Mining and Chemical Company Joint-Stock Company in the amount of 100 percent of the authorized capital of the company and sources of payment for its services” (account number UA 798201720343150002000005357, State Treasury Service, Kyiv, USREOU code 00032945) in the amount of UAH 12,258,220 (including value added tax of UAH 2,043,036.67) and a variable part of remuneration in the amount of 1 percent of the value of the sold block of shares;
• direction of dividends to the state budget based on the results of the company’s financial and economic activities in 2024 and for the period that the State owned before the sale, represented by the State Property Fund of Ukraine in 2025, in accordance with the requirements of the law.

The term for fulfilling the buyer’s obligations regarding conditions that do not have a specific period for their fulfillment, except for mobilization tasks, is five years from the date of transfer of ownership of the acquired block of shares to the buyer.

Time and place of the object inspection: on weekdays from 09:00 to 18:00; at the addresses:

• Head office, 35, Zhylianska St., Kyiv,  contact person: Dmytro A. Kulga, tel. (+38044) 359-02-50.
• Vilnohirsk Mining and Metallurgical Plant Branch of UMCC JSC, 1, Stepova St., Vilnohirsk towwn, Dnipropetrovsk Oblast, contact person: Stanislav Y. Chebotaryov, Head of the branch, tel. (+3805653) 5-49-50;
• Irshansk Mining and Processing Plant Branch of UMCC JSC, 1, Shevchenka St., 1, Irshansk urban-type settlement, Zhytomyr Oblast, contact person: Oleksandr M. Bovsun , Acting Head of the branch, tel. (+3804145) 4-53-81.

Information about the adviser: BDO Corporate Finance LLC; address: 201/203, Kharkivske Shose St., 10th floor, Kyiv, 02121; contact persons: Vitaly M. Strukov, tel. +38 (050) 410-50-04; Oleksandr Vю Nesteruk, tel. +38 (067) 408-38-42; e-mail address: corpfin1@bdo.ua.

Auction organizer: State Property Fund of Ukraine, address: 18/9, Henerala Almazova St., Kyiv city, website address – https://www.spfu.gov.ua/, https://privatization.gov.ua/.

Phone for inquiries: +38044 200-31-12; business hours: Mon-Thurs from 9:00 to 18:00, Fri from 9:00 to 16:45; e-mail: gordienko@spfu.gov.ua; responsible person: Oleksiy L. Gordienko.