NBU's currency control complicates int'l deals, hinders M&A in Ukraine

MOSCOW. May 15 (Interfax) - Currency control by the National Bank of Ukraine (NBU) complicates international transactions and hinders mergers and acquisitions (M&A) in the country, Ukrainian media said, citing participants in the M&A panel of the second Ukrainian PE & VC Summit in Warsaw.

"The participants discussed current challenges facing Ukraine's M&A market, in particular that currency control holds capital 'hostage' and complicates international deals. Though the domestic M&A market is active, it is still not easy to close deals in hryvni. The average period for concluding a deal has increased from one to two or three years," SCM Group's Umgi investment company was quoted by the media as saying in a statement with reference to Umgi's Chief Investment Officer Nadezhda Kaznacheyeva, who was a speaker at the event.

The geographical expansion of Ukrainian companies continue, but financing and securing deals remains difficult, Kaznacheyeva said. At the same time, strategic investors are cautious, as they need to see predictability before their interest can be revived.

"The forecast for 2025 is as follows: activity is expected to increase in the agricultural sector, IT, energy, logistics, infrastructure, and possibly in miltech. Industrial minerals are an important asset for the country's recovery. Despite all difficulties, the market is gradually coming back to life," she said.

Umgi, founded by SCM Group in 2006, is an investment company with a focus on developing businesses in the raw materials and processing sectors. Its investment focus is mineral extraction, management of by-products and processing waste, and production of industrial goods and services. The total value of its portfolio companies is estimated at over $500 million.