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Madacic

President of Ukraine Aero Engine: Has sold shares to Chinese companies and will receive $ 250 million in investment

Although the United States has repeatedly blocked, Chinese enterprises have acquired new progress in the acquisition of shares of Ukrainian aviation engine giant Motor Sich.

 

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Motor Sich engine, pictured by The Associated Press

According to the Ukrainian State News Agency (Ukrinform) on the 15th, the president of Ukrainian aero engine company Motor Sich, Boguslaev, said on the same day that the company’s shares had been sold to Chinese companies. Chinese companies have promised to invest $ 250 million in it within two years. According to Wutong News Agency, Chinese companies have acquired more than 50% of Motor Sich shares.

President Evaras Abromavicius, chairman of Ukraine Defence Industry Group, also confirmed the news, saying that Chinese investors have bought shares in Motor Sich, but the transaction is still under review by the antimonopoly committee.

 

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On the 13th, Boguslaev explained the reason for the sale at a press conference: “I may close the factory, I may lay off workers, which is the problem I must face. So we decided to find an investor and someone asked us Prompt who will be (investors), and then we will go to China to communicate. ”

“On our stock exchange, the holders of (company) shares sold them to (Chinese), and I sold my shares.”

He also revealed the plan of Chinese investment after the press conference. In addition to buying stocks, Chinese companies also promised to invest 250 million US dollars in factories in the next two years.

Boguslavev also told reporters that day: “If you don’t find them (Chinese company), you will not stand here, and I will not accept your interview like this.”

Although he did not disclose the shares purchased by the Chinese side, Wutong News Agency said that Chinese enterprises have acquired more than 50% of the shares of Motor Sich, but still have more than 25% of the shares, which is controlled by the Ukrainian Defense Industry Group (UkrOboronProm).

The Ukrainian “Kiev Post” reported that, as an important defense enterprise of the former Soviet Union, Madasić mainly engaged in the engines of military aircraft, cruise missiles and helicopters. The company also designed engines for the world’s largest transport aircraft An-225.

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After the end of the Cold War, Motor Sich has long provided helicopter engines for the Russian military. However, after the conflict between Ukraine and Russia in 2014, Ukraine declared illegal arms sales to Russia, causing serious damage to the company’s business, and its profit fell from $ 1.1 billion to $ 480 million.

Previously, the United States has on several occasions prevented the company from being acquired by China, thereby preventing China from acquiring key technologies for aero engines. The dispute between the two parties has lasted for three years.

As early as 2017, the Chinese side had also proposed the acquisition of Motor Sich, but the Ukrainian security department stepped in to obstruct it, while freezing Motor Sich product inventory.  A US politician has argued that it is fair for the United States to get involved in the acquisition as a client.

Former U.S. national security adviser Bolton came forward to block Chinese acquisitions again in August this year. He went to Ukraine after the G7 summit. One of the meetings involved the issue of Motor Sich. Bolton tried to push the antitrust commission to reject China’s takeover.

However, according to the Wall Street Journal reported on November 5, Eric Prince, Trump’s informal adviser and private security contractor, also discussed the acquisition of Motor Sich. The US government is also trying to find other buyers for Motor Sich.

 

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