Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management

This note focuses on the current debt situation of UZ, the associated risks and ways to manage them. It does not address broader financial sustainability issues and how to finance the investment backlog. This is of paramount importance and should b...

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Main Author:	World Bank Group
Format:	Policy Note
Language:	English
Published:	World Bank, Washington, DC 2019
Subjects:	RAILWAY REFORM PUBLIC JOINT STOCK COMPANY PUBLIC FINANCIAL MANAGEMENT DEBT MANAGEMENT LIQUIDITY
Online Access:	http://documents.worldbank.org/curated/en/278831563254963410/Ukraine-Ukrzaliznytsia-Modernization-Strategy-Policy-Note-4-Debt-Management http://hdl.handle.net/10986/32288

id	okr-10986-32288
recordtype	oai_dc
spelling	okr-10986-322882021-05-25T09:26:55Z Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management World Bank Group RAILWAY REFORM PUBLIC JOINT STOCK COMPANY PUBLIC FINANCIAL MANAGEMENT DEBT MANAGEMENT LIQUIDITY This note focuses on the current debt situation of UZ, the associated risks and ways to manage them. It does not address broader financial sustainability issues and how to finance the investment backlog. This is of paramount importance and should be a priority for future work. This note uses an analysis of the available audited financial statements in the January 1, 2014 -June 30, 2018 period to discuss risks and concerns regarding the financial viability of the UZ going forward given the near-critical liquidity situation and widespread solvency concerns in the financial markets. This note suggests some steps for ameliorating the present dire liquidity situation: (i) A clear market opening and corporate restructuring strategy; (ii) detailed review of the asset valuation exercise carried out by reputable asset evaluators; (iii) based on the results of asset revaluation, seek Government consent to sell non-core assets and (iv) seek support in raising substantial investment resources at reasonable cost necessary to carry out the adopted modernization strategy and reach sustainable levels of business operation in the medium-to-longer run (such as increasing the share of current assets by selling non-core fixed assets such as land and buildings). Any sustainable solution going forward, hinges on an open commitment to market opening and deep organizational and management restructuring programs discussed in other policy notes. Given the ownership structure, political and social importance of UZ, and the legal status of the company, this cannot be done without full ownership and support of the government (including the Ministry of Finance). Additionally, given the size of the company and present institutional and governance risks, successful restructuring and changed perception of domestic and international financial markets will critically depend on the credibility of the program. 2019-08-16T19:57:17Z 2019-08-16T19:57:17Z 2019-06-24 Policy Note http://documents.worldbank.org/curated/en/278831563254963410/Ukraine-Ukrzaliznytsia-Modernization-Strategy-Policy-Note-4-Debt-Management http://hdl.handle.net/10986/32288 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Policy Note Economic & Sector Work Europe and Central Asia Ukraine
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	RAILWAY REFORM PUBLIC JOINT STOCK COMPANY PUBLIC FINANCIAL MANAGEMENT DEBT MANAGEMENT LIQUIDITY
spellingShingle	RAILWAY REFORM PUBLIC JOINT STOCK COMPANY PUBLIC FINANCIAL MANAGEMENT DEBT MANAGEMENT LIQUIDITY World Bank Group Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
geographic_facet	Europe and Central Asia Ukraine
description	This note focuses on the current debt situation of UZ, the associated risks and ways to manage them. It does not address broader financial sustainability issues and how to finance the investment backlog. This is of paramount importance and should be a priority for future work. This note uses an analysis of the available audited financial statements in the January 1, 2014 -June 30, 2018 period to discuss risks and concerns regarding the financial viability of the UZ going forward given the near-critical liquidity situation and widespread solvency concerns in the financial markets. This note suggests some steps for ameliorating the present dire liquidity situation: (i) A clear market opening and corporate restructuring strategy; (ii) detailed review of the asset valuation exercise carried out by reputable asset evaluators; (iii) based on the results of asset revaluation, seek Government consent to sell non-core assets and (iv) seek support in raising substantial investment resources at reasonable cost necessary to carry out the adopted modernization strategy and reach sustainable levels of business operation in the medium-to-longer run (such as increasing the share of current assets by selling non-core fixed assets such as land and buildings). Any sustainable solution going forward, hinges on an open commitment to market opening and deep organizational and management restructuring programs discussed in other policy notes. Given the ownership structure, political and social importance of UZ, and the legal status of the company, this cannot be done without full ownership and support of the government (including the Ministry of Finance). Additionally, given the size of the company and present institutional and governance risks, successful restructuring and changed perception of domestic and international financial markets will critically depend on the credibility of the program.
format	Policy Note
author	World Bank Group
author_facet	World Bank Group
author_sort	World Bank Group
title	Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
title_short	Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
title_full	Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
title_fullStr	Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
title_full_unstemmed	Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management
title_sort	ukraine – ukrzaliznytsia modernization strategy : policy note 4 – debt management
publisher	World Bank, Washington, DC
publishDate	2019
url	http://documents.worldbank.org/curated/en/278831563254963410/Ukraine-Ukrzaliznytsia-Modernization-Strategy-Policy-Note-4-Debt-Management http://hdl.handle.net/10986/32288
_version_	1764476139213946880

Ukraine – Ukrzaliznytsia Modernization Strategy : Policy Note 4 – Debt Management

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