20 January 2021, Kyiv - The official position of the Supervisory Board of JSC "Mahistralni Gazoprovody Ukrainy" regarding Sale and Purchase Agreement of the Shares in the authorized capital of LLC "Gas TSO of Ukraine" (GTSOU).
In response to the media inquiries, the Supervisory Board of JSC "Mahistralni Gazoprovody Ukrainy" (MGU) considers it reasonable to express the Supervisory Board's position regarding certain clauses of the Sale and Purchase Agreement of the Shares in the authorized capital of GTSOU (hereinafter – the "Agreement"), which are the subject of media interest.
The Agreement, the terms, and conditions of which had been approved by Decree No.1086-r of the Cabinet of Ministers of Ukraine, was entered on 22 November 2019. According to the Agreement, MGU purchased from JSC "Ukrtransgaz" a 100% share in the authorized capital of GTSOU, with the terms providing for the initial payment and dynamic component of the price, valid for 15 years.
The MGU Supervisory Board has repeatedly expressed our concern over the reasons for inclusion and the application of the dynamic component of the price and officially communicated our position. The effective Agreement makes it impossible to make installment payments to JSC "Ukrtransgaz", and the necessary and sufficient investments into the modernization of the gas transmission system to fulfill the program approved by the Regulator (NERCU).
We have addressed the Cabinet of Ministers of Ukraine (CMU) regarding entering into the negotiations to seek possible ways of resolving these issues and amending the Agreement, which had been approved by the CMU in 2019.
The Supervisory Board will continue to defend our position on this issue. We are certain of the need to amend the text of the Agreement.