KYIV. June 8 (Interfax-Ukraine) – The blocking of funds of JSC Ukrainian Energy Machines (UEM, Kharkiv) in the settlement accounts of Megabank, declared insolvent by the National Bank, jeopardizes the fulfillment of the company's contracts with JSC Ukrhydroenergo for the modernization of hydroelectric power plants (HPP) of the Dnipro cascade, CEO of Ukrainian Energy Machines Viktor Subotin has said.

"Ukrainian Energy Machines, formed from Turboatom and Electrotyazhmash, has been fulfilling a contract for Ukrhydroenergo for more than five years to modernize the hydroelectric power station of the Dnipro cascade at the expense of the EBRD. Megabank served enterprises under these contracts all these years. In particular, in recent months, about UAH 480 million went into the accounts, which we planned to use for the implementation of contracts, but now this money has actually been stolen from us," CEO of Ukrainian Energy Machines and main shareholder of Megabank Subotin said at a press conference at Interfax-Ukraine on Wednesday.

He recalled that Turboatom and Electrotyazhmash won a number of international tenders for the modernization of the Dnipro cascade HPPs more than five years ago, ahead of many competitors (Alstom, Andritz, Chinese companies), but the main requirement of the contracts concluded then was a bank guarantee for an advance payment, which was then issued to these two companies (now one) by Megabank.

Subotin explained that this was also the decision of the bank's supervisory board, in which the EBRD representatives worked as shareholders all these years, and they accepted the bank guarantee as security, and all accounts under these contracts were also opened with Megabank.

He added that in total, about UAH 1.5 billion of Ukrainian Energy Machines' funds were blocked in Megabank's accounts, including about UAH 500 million in the company's settlement accounts, under which payments for raw materials, materials, components, salaries for the fulfillment of contracts were planned, and about UAH 1 billion – security under guarantees.

"And now we cannot allocate funds for the modernization of hydroelectric power plants, which, in my opinion, will hit the scale of modernization of the energy equipment of our state very much, because all the turbines and generators at the electric, hydro, thermal, nuclear power plants of Ukraine are ours. And if, God forbid, we allow a technological failure in the maintenance of these facilities, it will be a big disaster for the state," Subotin said.

He added that the current situation was repeatedly brought to the attention of the National Bank, and expressed the hope that a common language with the regulator would still be found.

"Because we are very surprised that during such a disaster and devastation, one cannot take into account the state interests and the interests of state-owned enterprises that support the economy," the head of Ukrainian Energy Machines concluded.

According to head of the management and supervisory board of Megabank (2015-2021) Oleksiy Yatsenko, if in 2015 and early 2016 the share of Turboatom's funds in the bank's liabilities was 25%, now it is less than 10%.

As reported, the National Bank of Ukraine decided to declare Megabank insolvent on June 2.