Friday08 November 2024
swoboda.in.ua

Global player in Ukrainian business: NEQSOL Holding, an international group of companies, continues to invest in Ukraine amid the ongoing war.

On October 11, 2024, the Ukrainian Cabinet made the decision to sell the largest mining company in Europe, OJSC OGHK. The buyer is the international group of companies NEQSOL Holding. Here, we provide insights into the holding, its foreign assets, and its bold move to invest in Ukraine during a time of military conflict.
Международная группа NEQSOL Holding активно инвестирует в украинский бизнес, несмотря на военные действия, становясь глобальным игроком в стране.

On October 11, 2024, the Ukrainian Cabinet made the decision to sell the largest mining company in Europe – JSC OGHK. The buyer is the international group of companies NEQSOL Holding. We discuss the holding, its foreign assets, and its boldness in investing in Ukraine during a state of war.

A recently published analytical report by the renowned international company KPMG titled "M&A Radar: Ukraine for the first 9 months of 2024" highlights that the continuous focus on privatization through the State Property Fund of Ukraine underscores the unwavering commitment of the Ukrainian government to attract additional investments and stimulate economic growth. Among the recent successes is the privatization auction for the state titanium manufacturer "United Mining and Chemical Company," which belongs to the NEQSOL holding.

For the state share of OGHK "Titan," amounting to 100% of its charter capital, the international holding offered 95.6 million USD (3.94 billion UAH). This exceeds the starting price by 39 million UAH.

According to the privatization agreement's requirements, the new owner commits to maintaining the main activities of the enterprise, investing at least 400 million UAH in technical re-equipment and modernization, paying off wage debts and obligations to the budget, as well as settling overdue creditor debts.

The process of completing all subsequent necessary procedures for the final transfer of ownership rights is currently underway.

NEQSOL Holding

NEQSOL Holding is an international group of companies with experience in industries such as manufacturing, high technology, energy, construction, and telecommunications. The holding has three headquarters located in Baku, Kyiv, and Amsterdam, and conducts business in 11 countries worldwide, including Azerbaijan, the USA, the UK, Ukraine, the Netherlands, Turkey, Georgia, Kazakhstan, Mexico, Colombia, and the UAE. In total, the group employs 12,000 people.

Since the establishment of the holding structure, its asset value has increased fivefold. Among its acquisitions is Vodafone Ukraine, a company that significantly contributes to the telecommunications infrastructure of our country.

NEQSOL Holding's investment strategy focuses on medium and large projects, acquiring strategic equity stakes, as well as investing in startups from scratch and innovative ventures.

The group began its operations in the early 1990s in the oil and gas sector of Azerbaijan. Now, three decades later, 70% of its business is generated outside of Azerbaijan.

The energy business of NEQSOL Holding is structured into two major groups: Nobel Energy and Nobel Upstream.

Nobel Upstream is involved in exploration and production in the UK, USA, and Azerbaijan, while Nobel Energy provides a full range of integrated diversified services for operators in the energy sector.

One of the more notable acquisitions of the holding during its existence was Audubon Companies in the USA in 2023. It ranks among the top 20 engineering companies in the United States and is known for its expertise in complex projects such as launch platforms for spacecraft (including for NASA), renewable energy solutions, and carbon capture and drilling technologies.

Additionally, Nobel Energy in Azerbaijan recently invested in solar power plants in the Nakhchivan and Karabakh regions. This strengthens the holding's position in the energy segment. It has also made investments to support the transportation and storage of natural gas in Turkey.

NEQSOL Holding also invests in the construction sector: the company Norm OJSC, which is the largest cement producer in the South Caucasus.

The group owns Bakcell, the second largest mobile operator in Azerbaijan; the Georgian company Caspian Online, which owns a fiber-optic line running along the bottom of the Black Sea connecting Georgia with Eastern Europe; and Vodafone Ukraine.

Currently, NEQSOL Holding is building an ecosystem of integrated telecommunications services and solutions in Azerbaijan, Ukraine, and the Caucasus region.

This is being realized, among other things, through the "Digital Silk Road" project, about which we will discuss further below. It is worth noting that in 2020, at the Global Forum on Strategic Infrastructure Leadership (USA), the Digital Silk-Way was recognized as one of the top five infrastructure projects in Asia.

As for the immediate plans, after the privatization process is completed, the holding aims to focus on developing the asset – JSC "United Mining and Chemical Company": primarily fulfilling all privatization obligations, including the required investment volume.

As a strategic investor, the group considers the possibility of additional investments; however, their volume will depend on further liberalization of Ukraine's currency market. Specific plans and figures will be announced after the completion of the privatization process and a thorough examination of the newly acquired company.

However, it is already clear that the inclusion of such a powerful asset as JSC OGHK in the portfolio will significantly strengthen the holding's position in the international business arena, as titanium production is at the center of global attention due to steadily rising demand.

Importantly, the holding has no assets or business interests in Russia. Successfully operating in the global business environment, the holding strictly adheres to international legal standards in all its assets, including sanctions against the aggressor country.

Acquiring such large assets in a country at war is not only a bold strategy for expansion into global markets but also a strong message to international investors: Ukraine is a place where investments can and should be made.