"Kyivmiskbud" Still Working on Development Strategy While Waiting for Billions – CEO

The holding company Kyivmiskbud, the country's largest developer, which has been struggling with financial problems in recent years, is currently working on a comprehensive development strategy. This was announced by the company's CEO, Svitlana Samsonova, during a meeting with initiative groups of investors. According to her, the management of Kyivmiskbud is also working on marketing and advertising strategies.

The inflow of the promised financial aid of UAH 2.56 billion from Kyiv's budget, intended to rescue the developer, is planned for the second half of autumn. The absence of even an approximate plan for further actions on construction sites has caused confusion among many investors, some of whom have been waiting for their purchased apartments for over five years.

Kyiv City Council deputies voted to allocate the funds to Kyivmiskbud back in October last year, meaning the company's management has had nearly 10 months to develop plans for resuming construction works. Or even as much as a year and a half: the amount required for project completion had already appeared in the financial forecast by Ernst & Young and in the recommendations of a supervisory commission in autumn 2023, when the company was still headed by Ihor Kushnir.

However, throughout this time, the new management has been presenting investors with the same plans developed under Kushnir: first, to distribute the received funds among 10 residential complexes with the highest level of readiness; then to resume work on other, most investment-attractive complexes; and finally to direct the revenue generated toward completing the rest of the ongoing projects. Detailed information about the future of each complex is again promised later — this time at the end of September, right before the start of recapitalization.

Investors fear that the new management, which has been leading the developer since February 2024 after the end of Kushnir's 12-year presidency, simply lacks a clear vision for completing all projects, even with additional funds raised through the resumption of apartment sales. The expected UAH 2.56 billion is insufficient to finance all the necessary work for each complex on Kyivmiskbud's balance sheet. An additional UAH 2.28 billion is still needed. In theory, this amount is expected from the state budget as compensation for 18 unfinished Ukrbud projects, which the Cabinet of Ministers obliged the company to complete back in June 2020 — projects that, according to auditors, became one of the key factors behind the developer's financial troubles.

At the meeting with investors, the Chairman of Kyivmiskbud's Supervisory Board, Vladyslav Andronov, shared plans to initiate the creation of a working group to coordinate interaction with the Cabinet of Ministers, the Ministry of Finance, and other relevant agencies on the issue of compensation. However, until now, all discussions with the Government have boiled down to the fact that, in the context of a severe wartime budget deficit, such compensation is simply impossible.

As a reminder, on October 31, 2024, Kyiv City Council, which owns 80% of Kyivmiskbud's shares, supported the decision to increase its authorized capital through an additional share issue and repurchase. After recapitalization, the KCC's share will reach 99.87%. The inflow of UAH 2.56 billion is expected between October 1 and November 28.

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