Turboatom : The labor collective and the trade union organization of “Ukrenergymachines” JSC appealed to the President of Ukraine

On July 15, 2022, the labor collective and the trade union organization of "Ukrenergymachines" JSC appealed to the President of Ukraine Volodymyr Zelensky with a request to intervene in the situation that has arisen around JSC "Megabank" and prevent the stoppage of the activities of the Ukrainian power engineering giant.

The primary trade union organization "Ukrenergymachines" JSC (Kharkiv) represents the interests of more than 5,000 employees. The workforce of "Ukrainian Energy Machines" JSC (formerly JSC "Turboatom" and State Enterprise "Plant Elektrotyazhmash") is an integral part and driving force of the leading machine-building enterprise in Ukraine and Kharkiv region, which on January 21, 2022 celebrated its 88th anniversary since its foundation.

In the letter, the labor collective and the trade union organization appeal to the President of Ukraine Volodymyr Zelensky as the guarantor of the State sovereignty, territorial integrity of Ukraine, observance of the Constitution of Ukraine, human and civil rights and freedoms, with a request to intervene in the situation that has arisen around JSC "Megabank".

The trade union organization draws attention to the fact that during the period of martial law the staff of the enterprise did not stop its work and continues to fulfill its obligations, the workers did not stop the supply of turbine and generator equipment for Ukrainian hydro and nuclear power plants - critical infrastructure facilities of national importance that provide electricity Ukraine.

In the context of the open military aggression of the Russian Federation against Ukraine, its statehood and people, the labor collective wants to work and is determined to continue to successfully implement the production plans and mobilization tasks of the State.

"The stable work of our team was hampered by the news from the National Bank of Ukraine (hereinafter referred to as the NBU) that JSC "Megabank" was classified as insolvent.

"Ukrenergymachines" and the trade union organization of "Ukrenergymachines" have been fruitfully cooperating with JSC "Megabank" since 1998. They have been cooperating in various areas - salary projects, cash management services, opening and servicing current non-cash accounts, providing guarantees for the fulfillment of contractual obligations, etc.

During this long and fruitful period of cooperation, neither between the enterprise nor between the trade union organization had any problems and misunderstandings with this banking institution.

We do not remember any complaints from our employees, pensioners and partners about its work," - the application letter says.

From June 02, 2022, after the decision of the NBU to classify "Megabank" as insolvent, employees of the enterprise cannot use card accounts, withdraw cash from them to support their family members, pay for essential goods, receive priority paid services that are essential for human life.

In addition, now the company, which has previously won the international competitive bidding (tenders), financed by the European Bank for Reconstruction and Development (hereinafter - the EBRD) and the European Investment Bank (hereinafter - the EIB), is reconstructing the existing hydroelectric power plants of Ukraine, which are part of the PJSC "Ukrhydroenergo", which, in particular, includes Kaniv HPP, Kyiv PSPP, Dnipro, Kremenchuh, Dniprodzerzhynska, Shidnodniprovska HPP, Dnipro HPP.

The application letter notes that the liquidation of the bank will cast doubt on the fulfillment of contracts concluded for financing by the EBRD and the EIB, and, as a result, will lead to a lack of production load.

In the context of the war that is taking place in Ukraine and, accordingly, the unfavorable economic situation that has now developed not only for "Ukrainian Energy Machines" JSC, but also for many other domestic producers, which directly form the country's GDP as a result of their activities, their support by the State is extremely necessary.

From the official announcements of the Deposit Guarantee Fund for Individuals, it is known that on July 19, 2022, the deadline for submitting proposals by investors ends.

If there is no proposal for the full redemption of the bank to continue its activities, the liquidation of JSC "Megabank" will begin in the future.

To avoid a catastrophic situation, there is a legal mechanism for resolving the issue:

The Ministry of Finance of Ukraine can become the owner of JSC "Megabank", which will allow preserving the banking system, and hence the funds of "Ukrainian Energy Machines" JSC and those projects that were implemented jointly with the bank. In the future, the Ministry of Finance sells the bank to an interested investor.

The change of the owner of the bank occurs in three stages.

Three-stage change

Stage I - the Ministry of Finance of Ukraine becomes the owner, as a result of concluding an agreement with the Deposit Guarantee Fund at a cost of 1 UAH.

Stage II - the "bail-in" procedure is carried out - the conversion of obligations of large creditors into bank shares.

The bank will be owned by the Ministry of Finance of Ukraine, "Ukrenergymachines" JSC and other creditors

Stage III - the sale by the Ministry of Finance of Ukraine of its share in favor of an investor or other options for using the bank's assets by the state," - the application letter says.

Currently, none of the state bodies has made a decision on the implementation of the procedure for the withdrawal of JSC "Megabank" from the market with the participation of the state.

"Only your personal intervention and strong-willed decision of the President of Ukraine can correct the situation and save our enterprise," - the text of the appeal says.

"Ukrenergymachines" JSC in figures for 2007 - 2021:

• net income from sales of products is about 24.1 billion UAH (1.6 billion USD).
• net profit of about 7.2 billion UAH (453 million USD).
• the total amount of funds transferred by "Ukrenergymachines" JSC to the state and local budgets is about 8.3 billion UAH (477 million USD).