The Kyiv City Council has approved a decision to increase the authorized capital of the public joint-stock company "HC Kyivmiskbud" with the aim of stabilizing the financial situation of the company through additional issuance and acquisition of shares amounting to up to 2.56 billion UAH.
This decision was supported by 77 city council deputies during a plenary session on Thursday.
"The implementation of this decision will improve the financial condition of the public joint-stock company 'HC Kyivmiskbud', which will facilitate the restoration and completion of residential complexes. This will help address the issues of a large number of citizens, particularly military personnel and their families, alleviate social tension, strengthen trust in the authorities, and achieve an overall positive synergistic effect in the construction industry and the real estate market in Kyiv," the explanatory note to the decision project states.
It is noted that the additional issuance will be carried out without reducing the existing size of the shares held by the territorial community of Kyiv (80%).
The calculation of the amount of 2.56 billion UAH was made as the difference between the required additional financing for the company under the basic scenario determined during the audit of "Kyivmiskbud" and the compensation planned by the government for the total planned damage of 2.28 billion UAH.
The Kyiv Council also supported a resolution to appeal to the Cabinet of Ministers of Ukraine with a request to consider compensating the public joint-stock company "HC Kyivmiskbud" for the total planned damage of 2.28 billion UAH associated with the completion of "Ukrbud" facilities, including through preferential loans and other forms of assistance.
According to the draft appeal, the Cabinet is proposed to consider compensation not only through capital budget transfers but also by providing preferential loans for financing construction, revising the terms of state programs for mortgage lending to the population, and assisting in finding other sources of financing.
Additionally, it is proposed to purchase housing for military personnel in the residential complexes of HC "Kyivmiskbud".
Currently, HC "Kyivmiskbud" has 24 construction sites: more than 120 buildings with a total residential area of 548.6 thousand square meters. As of May 31, 2024, out of the 18 facilities of "Ukrbud" accepted on the balance sheet, seven have been fully commissioned, and four partially.
As reported, in March 2024, the Kyiv City State Administration created a temporary commission to address problematic issues related to the activities of the public joint-stock company "HC Kyivmiskbud".
According to the audit of "Kyivmiskbud" conducted in 2023 by the state enterprise "Baker Tilly Ukraine Consulting", LLC "NHD-AUDIT" and LLC "Ernst and Young", no signs of actions leading the company to bankruptcy, concealment of financial insolvency facts, or mass operations with related parties were found. At the same time, auditors established that the activities of "Kyivmiskbud" were disrupted due to external factors: COVID-19, full-scale war, and the "Ukrbud" factor.
The Kyiv Council's commission approved an interim report on November 17, 2023, with recommendations and proposals for the further operations of the developer, including the purchase of apartments in "Kyivmiskbud" facilities, considering the possibility of providing a financial loan or recapitalization of the company. The commission also recommended that the Kyiv City Council appeal to the Cabinet of Ministers regarding compensation for "Kyivmiskbud" for the total planned damage associated with completing the projects of the construction corporation "Ukrbud" amounting to 2.28 billion UAH.
HC "Kyivmiskbud" was established in 1994 based on the assets of the state communal construction corporation "Kyivmiskbud" by merging the controlling share packages of 28 enterprises and other assets into its authorized capital. The company includes 40 joint-stock companies, in which it owns shares, six subsidiaries, and 51 enterprises as associated members.
The main shareholder of the public joint-stock company "HC Kyivmiskbud", according to the National Commission on Securities and Stock Market (NSSMC), is the Kyiv City Council (80%).