Ukrnafta: Corporate Governance Case By Mr. Dmitro Tarabakin Director Investment Bank “Dragon Capital”

Slides:

Advertisements

Similar presentations

By Austin, Harelle, Jemma - The companies use their cash from their operations for investing in current, temporary, and long term investments.

Advertisements

Control vs. Minority Interests and Marketability Discounts for ESOPs Ohio Employee Ownership Center Akron/Fairlawn Hilton Fairlawn, Ohio April 16, 2004.

To play, start slide show and click on circle Yellow OrangeGreenPurplePink

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Classes-To-Go! 2B Dividends Matter! Shanna Rendon.

Risk and Return, Business Structures By R. S. Miolla.

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Appendix D Investments in Other Corporations PowerPoint Authors:

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Equity Markets and Stock Valuation Chapter 7.

McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-1 McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights.

* * Chapter Nineteen Using Securities Markets for Financing and Investing Opportunities Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights.

Financing a Business. When starting a business, an entrepreneur must combine: o 1. Human Resources— Employees and Managers o 2. Natural Resources—Products.

TAKEOVERS, MERGERS AND BUYOUTS

> > > > Financing and Investing Through Securities Markets Chapter 18.

How the Stock Market Works. Stock A share in ownership of a company. A share in ownership of a company. Someone who owns stock in a company owns a part.

GLENCOE / McGraw-Hill. The Statement of Cash Flows.

North-West Telecom Key Business Objectives April 2005.

The International Financial System

CHAPTER 9. Chapter 9Mugan-Akman Investments purpose –as line of business –idle cash –strategic financial instruments –stocks –bonds –derivatives.

SOURCES OF FUNDS: 1- retained earnings used from the company to the shareholders as dividends or for reinvestment 2- Borrowing, this tool has tax advantages.

BEARS LOGISTIC CENTER Kyiv 2007 Project «Building of network of specialized logistic centers for agricultural products storage»

The Stock Market What you need to know to begin investing.

CITGO Petroleum Corporation Sheryll Dean ACG2021 Section 0H1 & 008

CHAPTER 3 Financial Statements, Cash Flow, and Taxes

Reporting and Analyzing Cash Flows Chapter 17. Purposes of the Statement of Cash Flows Designed to fulfill the following: – predict future cash flows.

Investment/Shareholders

1 Analysis on Cash Flow 2 9. Interpretation on Cash Flow Chart 1) Analysis on Cash Flow from Operating Activity 2) Cash Flow after Operating Activity 3)

Revise Lecture 29. Mergers and Acquisitions 1.Merger & Consolidation ? 2.Four ways of merger ? 3.Three types of merger? 4.Resisting in acquisition?

International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Needles Powers Principles of Financial Accounting 12e The Statement of Cash Flows 15 C H A P T E R ©human/iStockphoto.

RETAINED EARNING Prepared BY: MAHMOUD ABO KMIAL. Retained Earnings When a corporation makes a profit, it can spend that profit in two ways: a) return.

Chapter 18 Capital & Capital Market Financial Management  It deals with raising of finance, and using and allocating financial resources of a company.

The Statement of Cash Flows 15. Overview of the Statement of Cash Flows OBJECTIVE 1: Describe the principal purposes and uses of the statement of cash.

National Holding & Emirates International Investment Company Charting a Sustainable Roadmap with Strategic Partnerships.

Hans Christian Jacobsen Recent developments in Agribusiness in EBRD Rome 2005.

UNDERSTANDING EBITDA & FREE CASH FLOW CORPORATE HUMAN RESOURCE

2 - 1 Balance Sheet is “Stock” (as of) Other Statements are “Flow” (through time) When analyzing, keep “unusual events” in mind” NOTES.

CF Winter Stock Valuation ch 8 Stocks Similar to Bonds  real world  imaginary world.

Analyzing Financial Statements

Financial Management Chapter 17. Define finance and explain the role of financial managers. Describe the components of a financial plan and the financial.

Chapter Eleven Corporate Dividends. Distribution: Distribution: Strictly, refers to payments to shareholders that are not a sharing of profits; loosely,

Financial Management and the Securities Market 12 Chapter © 2004 by Nelson, a division of Thomson Canada Limited.

International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

LIDECO ( NTL – HOSE) Tu Liem Urban Development Joint Stock.

Investments Group #4 Bajacan, Karla Mae Carlos, Juan Paolo Castro, Patrick Lu, Enrico Rafael.

Purpose of the Statement of Cash Flows  Summarizes an entity’s cash receipts and cash payments during the period from operating, investing activities,

Financial Management Chapter 17.

Private Equity Investment as a Source of Financing for Leasing Companies Natalia Best, Vice-President Horizon Capital Banking Sector & Leasing Market Business.

Valuation Part 1 Presented by: Elson ong Yale-NUS Investment Masterminds 1) Several Key Financial Metrics 2) How to Identify Them in An Annual Report.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Investment Companies  Net Asset Value (NAV)  (Total portfolio value - liabilities) / # of shares  Management is usually contracted to an outside firm.

Financial Management Decisions n Investment: What assets to own? n Financing: How to pay for those assets? n Dividend: What to do with Net Income?

Chapter 3 - The Balance Sheet  The balance sheet provides a snapshot of the firm’s financial position on a specific date. It is defined by: Total Assets.

Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal.

Unit 3.5 Final Accounts. Financial Statements ▫Profit and Loss account ▫Balance sheet ▫Cash Flow statement Financial Accounting Management Accounting.

Profit and loss account Balance Sheet Cash Flow Statement.

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Business Finance FINANCING A BUSINESS. Financial Needs … Start up Capital (set up costs for a new business) Working Capital (day to day running costs)

Paul Wefers Bettink, MA, MBA BUSI 2504 – Essentials of Business Finance Lecture 5 – Chapter 8 Stocks.

1MEDSERV Operations Ltd Medserv p.l.c. Stockbrokers meeting 23 March 2011.

Topic 3: Finance and Accounts

Chapter 7 Obtaining the Right Financing for Your Business University of Bahrain College of Business Administration MGT 239: Small Business MGT239 1.

Presented by Nicolas Geldhof. Company presentation  Headquarters: City of Westminster, London  Foundation: Michael Marks & Thomas Spencer 1884 – Leeds,

Advanced Financial Accounting Lec-43 Main Ahmad Farhan.

Managerial ECONOMICS.

Principles of Management

Fund Analysis, Cash-Flow Analysis, and Financial Planning

Stock Valuation.

Evaluating International Investment Projects

Fund Analysis, Cash-Flow Analysis, and Financial Planning

X100 Introduction to Business

Presentation transcript:

Ukrnafta: Corporate Governance Case By Mr. Dmitro Tarabakin Director Investment Bank “Dragon Capital”

April 17, 2002Page No. 2 Profile The largest oil company in Ukraine (accounted for 92%, 18% and 37% of 2001 oil, gas, and gas condensate extraction respectively) The largest company in the PFTS in terms of MC (USD 217 mil.) and liquidity Posted USD 504 mil. net sales and USD mil. net income in 2001 Extracts oil and gas in eastern and western regions of Ukraine Extracts from 2,219 oil and 243 gas wells

April 17, 2002Page No. 3 Shareholder structure  The state controls a 50% stake + 1 share and a 0.03% stake via Naftogaz Ukrainy and the State Property Fund  The blocking minority group consists of Privatbank, Ukrsibbank, Alfa Nafta, and affiliated companies (Wartford Petroleum and others)

April 17, 2002Page No. 4 History of the conflict I.Minority shareholders have access to oil refining and retail networks, as well as financial resources, while Ukrnafta is the largest oil company in Ukraine and was the major oil supplier (before Russian oil companies entered Ukraine’s refining market) II.Up to 2001 minority shareholders controlled a nearly 30% stake. In 2000 they blocked creation of a subsidiary to operate in Yemen, protesting against the newly elected supervisory board. III.August 2001-present – Privatbank/Ukrsibbank group increased their stake to 40% and blocked three AGMs

April 17, 2002Page No. 5 Minority shareholders’ demands  5 out of 11 seats on the supervisory board  Transparency of gas sales to Naftogaz Ukrainy (payment on time and in cash) and repayment of Naftogaz’s debt to Ukrnafta (nearly USD 70 mil. by end-2001)  Change of the registrar, Ukrnaftogaz

April 17, 2002Page No. 6 The state’s stance on Ukrnafta  Ukrnafta is on the list of strategic companies  Vertical integration plans with Ukrtatnafta refinery are being implemented  Ukrnafta paid USD 232 mil. in taxes in 2001 and may pay the state USD 15 mil. in dividends  Ukrnafta was selling natural gas to Naftogaz Ukrainy at USD 24.6/ths. cu. m. in 2001, while the market price is close to USD 60/ths. cu. m.

April 17, 2002Page No. 7 Consequences of the conflict  Lost the Yemen contract (estimated oil extraction of 7.3 mil. bbl /year)  Delayed or lost opportunity of a JV with Libya’s National Oil Corporation  Inability to approve 2000 and 2001 results and pay out dividends  Inability to develop a long-term strategy

April 17, 2002Page No. 8 Conclusion  Ukrnafta is the biggest Ukrainian stock and any problems with it affect the whole equity market  The state is represented in Ukrnafta by Naftogaz Ukrainy and the State Property Fund. Up until now, the state has prevented any involvement in the management of Ukrnafta  The minority shareholders consolidated their stakes in order to have more influence over the company’s management, be able to elect members of the board and to control material foreseeable risk factors.

April 17, 2002Page No. 9 Conclusion (cont.)  The shareholder conflict at Ukrnafta has adversely affected the company’s international expansion plans, namely projects in Yemen and Libya.  Eventually, both Ukrnafta and the minority shareholders stand to benefit from the company’s vertical integration, as unification of production, processing and trading facilities will put Ukrnafta into a stronger competitor position vs. Russian oil companies actively expanding in Ukraine