Ukraine has reached agreement with Russian VTB concerning a $2bn loan, PM Mykola Azarov said on Friday, providing no other details. The loan, being the government’s largest external debt redemption this year, is maturing in early June. Pursuant to the original agreement signed in June 2010, the sides prolonged the loan every six months until maturity in June 2012, with the interest rate, which was subject to revision at the time of each extension, reportedly remaining unchanged at 6.68% p.a.

The NBU has further relaxed its reserve requirements for banks, decreasing the level of mandatory reserves that must be blocked in a separate central bank account from 60% to 50% starting from May 31. At the same time, the share of reserves to be kept with the NBU was increased from 30% to 40%.

Ukrainian arms export agency Ukroboronservice has signed a preliminary cooperation agreement with China to participate in the latter’s program for developing the construction of helicopter, jet and marine engines.

WSE-listed Ukrainian agricultural producer Industrial Milk Company (IMC) plans to increase this year’s milk output by 12% y-o-y to 20.3 kt thanks to yield growth as its milking cow herd is projected to remain unchanged

Ukraine’s industrial production (IP) was flat y-o-y in April, improving slightly from -1.1% y-o-y in March but underperforming both Bloomberg consensus and our estimate of +1.3% y-o-y. The improvement was fueled mainly by machinery output, which accelerated to +6.5% y-o-y from -5.6% in March on stronger railcar production. Growth in the chemical industry picked up (+10.5% y-o-y vs. 9.0% in March) while metallurgy slowed its pace of decline (-0.2% y-o-y vs. -1.6%). However, these minor positives were fully offset by deterioration in other industries, including food processing, oil refining and utilities.

Russian MP Valeriy Yazev said yesterday Russia does not object to inviting EU companies to a prospective gas transit consortium with Ukraine, but he stressed such a consortium should not only operate, but own Ukraine’s gas transportation system (GTS). The daily Kommersant quoted an anonymous source at Gazprom as saying this statement reflects the company’s position

Ukrainian real estate developer KDD Group announced the disposal of its interest in two projects, Sky Towers (KDD’s largest mixed-use project) and Zazimye (residential), to Cimbrorum Holdings for $202m. The company will receive only $12m in cash as the remaining proceeds will be used to cover the company’s debt to Cimbrorum ($22m) and Taccadero Trading, which earlier bought out Ukreximbank’s $168.4m loan to KDD which financed the development of Sky Towers. The deal is subject to shareholders’ approval at an AGM scheduled for May 31. The AGM will also vote to postpone publication of the company’s 2011 financial results until Nov. 20, 2012

LSE-listed MHP, the largest Ukrainian poultry producer, reported strong 1Q12 financials with revenues of $298m (+21% y-o-y), EBITDA of $84m (+48%) and net income of $48m (+148%). MHP’s chicken meat sales were up by 1% y-o-y to 85 kt over the period while prices surged by 31% y-o-y (flat q-o-q), to UAH 16.75/kg (net of VAT) on average. Poultry exports jumped by 70% y-o-y to 10 kt. Last quarter MHP also sold 82 kt of corn at an average price of $224/t, 19 kt of wheat at $186/t and 5.8 kt of soybeans at $397/t (all incl. VAT and in line with average market prices).

WSE-listed Ukrainian miner Sadovaya Group increased coal sales by 5.1% m-o-m to 78.1 kt in April as demand from power generators recovered. However, its 4M12 output remained 25.4% lower y-o-y. Sadovaya’s mining output was up 6.7% m-o-m to 42.5 kt in April (+43.9% y-o-y) while coal recovery from waste dumps was terminated due to dismantling an existing aging waste recovery factory that will be replaced by a new much more efficient complex in July. Coal trading operations expanded by 8.9% m-o-m to 35.6 kt last year, but were down 50.5% y-o-y

Russian authorities announced they have completed final quality examination of cheese samples from two Ukrainian producers, including WSE-listed Milkiland’s Mena subsidiary, clearing 11 out of 14 batches for imports to Russia (including four batches from Mena). The head of Russia’s Federal Consumer Protection Service (Rospotrebnadzor), Gennadiy Onishchenko, said quality checks will continue as some of the submitted cheese samples did not comply with Russian food safety standards