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  #22 (permalink)  
Old 25th September 2014, 22:52
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Putin warns Ukraine against implementing EU pact
Posted: 11:00, 24/09/2014 by newseurope

Moscow will curtail Ukraine’s access to vital Russian markets if Kyiv implements any part of a trade agreement with the European Union, President Vladimir Putin warned in a letter, toughening his stance on a deal at the centre of East-West tensions.

In a letter to Ukrainian President Petro Poroshenko, seen by Reuters yesterday (23 September), Putin warned that even changing national legislation to prepare for the EU-Ukraine trade deal, known as the association agreement, would trigger an immediate response from Moscow.

“We still believe that only systemic adjustments of the Association Agreement, which take into account the full range of risks to Russian-Ukrainian economic ties and to the whole Russian economy, will allow (us) to retain existing trade and economic cooperation between the Russian Federation and Ukraine,” Putin wrote in the letter, which is dated 17 September.

Putin did not go into detail about possible retaliation, but Russian Prime Minister Dmitry Medvedev said last week he had signed an order to curb Ukrainian exporters’ access to Russia. Those measures are yet to take effect.

Substantially raising Russian tariffs could mean €3 billion a year in lost business for Ukraine, which exports mainly steel, coal, chemicals and grains to Russia, EU diplomats say.

The EU-Ukraine deal is at the heart of a dispute that has grown from a tug-of-war between Brussels and the Kremlin over Kyiv to economic sanctions, the annexation of Crimea by Russia, armed conflict in eastern Ukraine, and concern about a new Cold War.

Following the overthrow in February of a pro-Moscow leader who rejected the EU deal, Ukraine’s parliament sealed a historic shift by ratifying the political and trade agreement. That put Kyiv on a path it hopes will bring the prosperity it sees in fellow ex-communist states like Poland.

Delayed or frozen?

In a last-minute concession to Moscow, the EU delayed implementing the trade accord until 31 December 2015. Brussels hopes that will give it time to assuage Russian concerns about the pact, which is now a legal treaty that cannot easily be changed.

But Putin’s letter suggests that the Kremlin considers the 15-month delay to the EU-Ukraine agreement a complete freezing of the process until Russian demands for changes to the legal texts are met.

“Adoption of such amendments to Ukrainian legislation, including implementing acts, will be considered as infringement of the arrangement to postpone implementation of the Association Agreement, entailing immediate and adequate retaliatory measures from the Russian side,” Putin wrote.

Putin wants three-way negotiations to amend the EU’s accord with Kyiv, which Russia says will hurt its own economy.

According to EU officials, Russia wants to remove more than 2,000 products eligible for duty-free access to the European Union, tearing up about a quarter of the agreement.

Russian companies are also concerned they will not be able to import into Ukraine after Ukraine adopts higher EU standards as part of its implementation of the pact.

Ukrainian companies will receive European technical help and funds to help adapt to EU regulations. But without some kind of agreement with the EU, Russia would have to put up its own funds to help its companies such as carmakers modernise and comply with EU standards.

EU officials say there is room for compromise.

Russian exporters could have a soft route to compliance with EU quality and other standards in Ukraine so that they only need meet the requirements for selling goods into the EU-Ukraine free-trade area over a very long time. Putin warns Ukraine against implementing EU pact - NEWSEUROPE

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Old 28th September 2014, 19:14
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To survive, Donbas industry “must stay in Ukraine”
Sep 25, 2014 4:33pm by Sergei Kuznetsov

Following the ceasefire between Ukrainian and pro-Russian separatist forces in the Donbas and an announcement by Kiev that it will grant self-rule status to the rebellious territories, the chances are increasing that Ukraine’s industrial heartland will find itself locked in a frozen conflict.

If so, what will happen to the Donbas economy, the source of 16 per cent of Ukraine’s GDP and 23 per cent of its industrial output?

“All sides will be obliged to find an agreement, as Donbas is not economically self-sufficient,” says Aleksei Ryabchyn of the Ukraine Reforms Communications Taskforce, a community of experts created to discuss Ukraine’s reform-related challenges. “This region has always been a part of the industrial cooperation both within Ukraine and between Ukraine and Russia.”

The steel industry, for example, relies on raw materials from neighbouring regions in Ukraine. “In addition, it needs to import 10 to 15 per cent of its high-quality coal from the Rostov region [in Russia] to increase the quality of the metal,” Ryabchyn says.

Most of the iron ore processed by plants in Donbas is supplied from the Kryviy Rih basin in the nearby Dnipropetrovsk region. According to a strategy note from Kiev-based Concorde Capital:the Donbas is self-sufficient in coking coal and coke, but has no in-house sources of iron ore. The integration of the Donbas region into Ukraine’s iron ore-coke-steel chain is very deep.

The Donbas is also heavily dependent on exports – it sells about 70 per cent of its products abroad. Ryabchyn says it is losing its traditional export markets because clients don’t want to deal with an unstable and unpredictable grey zone. He says most industrial enterprises in the Donbas have loans from western banks, while their competitiveness depends on western energy-saving technologies.

“I do not see any other reasonable way for the Donbas to exist, other than for it to remain under Ukrainian jurisdiction. Otherwise, this industrial region will die,” Ryabchyn says.

He believes that a shutdown of industry in the Donbas would create enormous social pressure. “We have not yet seen the miners and metalworkers on the streets of the towns and cities. However, discontented workers are a great force that can sweep any government, whether Ukrainian or separatist,” Ryabchyn warns.

Meanwhile, the authorities in Kiev face an urgent need to address the problem of stalled production and shipment of coal in the Donbas as a result of the rebellion.

Alexander Paraschiy, head of research at Concorde Capital, says territories within Donbas that are controlled by pro-Russian forces produce more than 90 per cent of Ukraine’s anthracite. “This coal is used at four power plants outside the Donbas that produce about 14 per cent of electricity outside the region. Other coal types produced in the rest of Ukraine are not suitable for these power stations,” he says.

Paraschiy says that parts of Donbas that are controlled by separatists are not self-sufficient, “either in terms of the production cycle, or from the standpoint of budget revenues and expenses.”

Total net subsidies to Donbas from Ukraine’s budget and industries were 38.6bn hryvnia in 2013 ($2.9bn) or 17 per cent of the region’s GDP. Kiev subsidised both the region’s budget deficit and its coal industry, as well as subsidising electricity and natural gas for local industrial enterprises.

Paraschiy believes that the government in Kiev will not continue to provide such support to the region for fear that political control over it will be lost. “Therefore, this ‘stale’ state of the region cannot last long. It is obvious that the best course of events is the re-integration of the region into the production chain of Ukrainian industry,” he says.

Petro Poroshenko, Ukraine’s president, said in a television interview on Sunday that Kiev would only provide financial assistance to territories that have “raised the Ukrainian flag”.

“Ukraine will finance those areas where there is peace, and where Ukrainian authorities are in power, including local self-governments which have been legitimately chosen,” he said.

Ryabchyn says that restoration of Ukrainian control over rebellious territories is a precondition for obtaining financial assistance for the restoration of the Donbas from western donors. “The west will never be prepared to throw money into a black hole.”

The Ukrainian authorities hope that a significant portion of funding for the restoration of the Donbas will be allocated by western backers. The government plans to hold a donors’ conference in autumn 2014.

“It is quite realistic to think that western aid can be sought. Ukraine has a moral right to demand funding from western countries, as they need to feel guilty about the situation in the Donbas and the Crimea. In fact, countries like the US have violated the guarantees they provided to Ukraine under the Budapest Memorandum [on security assurances], so they have to somehow mitigate their guilt,” Paraschiy says.

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Old 29th September 2014, 13:42
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Ukrainian business scene's top acquisitions in 2014 so far
Sept. 29, 2014, 3:31 p.m. | Ivan Verstyuk
Political risk hasn't scared off all investors looking for yield-rich capital placement in emerging market such as Ukraine's.

The nation's ongoing crisis, exacerbated by Russia's war, has pushed the value of Ukrainian assets to critical lows, making them attractive for those who look for opportunities to inject money and obtain promising corporate stakes in a risky bet on big future profits.

The benchmark index of an equity trade platform Ukrainian Exchange alone fell by 19 percent since July, indicating the decrease in value of the local companies.

During a visit to the U.S. on Sept. 26, Ukrainian Prime Minister Arseniy Yatsenyuk invited American businesses to dare and invest more actively in Ukrainian assets, while U.S. Commerce Secretary Penny Pritzker during her visit to Kyiv on Sept. 27 emphasized that agriculture and energy sectors as of special interest for American investors.

Westinghouse, a Pennsylvania-based nuclear energy company, expressed interest in purchasing a 40 percent stake in Energoatom, the state-owned operator of Ukrainian nuclear power stations, analyst Yuriy Korolchuk told the Kyiv Post. However, Westinghouse will invest only after it receives a legal right to build new blocks on the local nuclear electricity makers.

Here is the list of the most notable acquisitions that have already been finalized this year or are currently on a late stage of the deal.

1. Austria-registered AMIC Energy Management GmbH bought the Ukrainian branch of Lukoil, a Russian oil company, which controlled 6 percent of the local gasoline market with 236 stations. Both sides of the deal did not disclose the price, although Oleksandr Sirenko, an analyst at Upeco consultancy, estimates it at $250 million, while Myroslav Tabaharnyuk of MT Invest thinks it's $300 million.

2. Russia's insurance giant Rosgosstrah sold Providna, a major Kyiv-headquartered insurer, to a Luxembourg-registered private equity fund that manages assets of a pool of Western European investors. Ukraine remains a substantially underinsured country with insurance expenditures per capita four times smaller than in the European Union. The whole industry contributed just 1.6 percent to the nation's $175 billion gross domestic product in 2013.

3. Concorde Capital, an investment company whose key shareholder Igor Mazepa is running for parliament, and owner of the eyeglass chain Luxoptyka Oleg Kalashnykov, acquired 80 percent of Dobrobut that manages seven medical treatment outlets in Kyiv and one in Donetsk. Analysts say the price of the stake at medical service provider doesn't exceed $18 million, while nation's privately run medical market is estimated at $12-13 billion.

4. Dmytro Firtash's Group DF paid $94 million for Pravex, a bank, to Italy's Intesa Sanpaolo, a $500 million discount compared to what Italian banking group paid for the bank to Kyiv's ex-mayor Leonid Chernovetsky. Analysts foresaw Firtash would merge Pravex with Nadra, another bank that he owns, but as of now he has not done it amid criminal prosecutions for bribery claimed by the U.S.

5. Terra Food, a diary maker with $315 million of revenue and $38 million of earnings before taxes in 2013, is buying 86 percent of Trostyanets Milk Factory from its previous owner Milk Alliance. Factory in Sumy Oblast will become group's eleventh production center.

6. KVV Group, local metal scrap collector that belongs to the British Gefest Inestments Limited, is purchasing Latvia's insolvent Liepajas Metalurgs, a steel maker, for $136 million. For the deal to be officially recognized by Latvian authorities, KVV Group is obliged to restore the production in 2014.

Ukrainian business scene's top acquisitions in 2014 so far

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Old 29th September 2014, 16:05
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Ukraine from Jan. 1, 2015 will get over 100 million euros for investment programs
Sept. 29, 2014, 5:31 p.m. | Interfax-Ukraine

Foreign grants worth a total of 110 million euros will be attracted to Ukraine from the beginning of 2015, Head of Vinnytsia Regional State Administration Anatoliy Oliynyk has said.
Ukraine from Jan. 1, 2015 will get over 100 million euros for investment programs

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Old 30th September 2014, 12:45
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Wall Street Journal: From Africa to Ukraine, deal police proliferate
Sept. 30, 2014, 10:17 a.m. | Wall Street Journal

These days, many big mergers don't just need to win antitrust approval from regulators in the U.S. and the European Union. Nations including China, Brazil and even Ukraine are part of a growing roster of countries that also want a say.

More than 100 international jurisdictions now claim antitrust authority to examine deals, embracing different approaches for evaluating whether a merger might harm consumers. Some also consider additional factors, like a deal's impact on domestic economic development.

The proliferation of antitrust enforcers is posing challenges for global corporations seeking to merge, increasing costs and lengthening time frames for getting a deal done. Cement giants Holcim Ltd. HOLN.VX +0.44% and Lafarge SA LG.FR -0.04% could wait a year or more while their antitrust lawyers seek clearance for their $50 billion merger in about 20 jurisdictions. Medtronic Inc. MDT -1.26% is soliciting regulatory approval for its $43 billion agreement to buy rival medical-device maker Covidien COV -2.41% PLC in such countries as China, Israel, Japan, Russia, South Korea, and Turkey.

In some recent cases, companies have agreed to country-specific concessions in order to win the go-ahead. Microsoft Corp. MSFT +0.06% , for example, committed to license certain patents to Chinese smartphone manufacturers in order to win China's approval to buy Nokia Corp.'s NOK1V.HE +0.15% handset business.

"We are continuing to move toward an interconnected global economy. This means that U.S. companies and consumers will increasingly be subject to or affected by the enforcement approach taken by antitrust agencies in other jurisdictions," Justice Department antitrust chief Bill Baer said this month in a speech at New York's Fordham University.

The growth of international merger enforcement stems from a range of factors, including the desire of emerging countries to protect their consumers as they enter global markets. Merger policing is also a way for some newer jurisdictions to extract fees and concessions from deal makers, some legal observers say. The competition arm of COMESA, a regional commission representing 19 states in eastern and southern Africa, including Egypt, Ethiopia and Sudan, can charge companies as much as $500,000 to submit deals for approval—nearly twice as much as the highest U.S. fees.

Mergers don't have to obtain approval in every country, but several pending and recent multinational deals illustrate how companies are seeking more regulatory blessings around the globe.

Antitrust lawyers point to Microsoft's Nokia acquisition as an example of the challenges companies can face. The companies sought antitrust clearance in 17 jurisdictions and the deal took eight months to close, even though most observers thought the transaction didn't raise major antitrust issues.

In addition to making patent commitments in China, Microsoft faced challenges in South Korea, the home of rival Samsung Electronics Co. 005930.SE -0.92% Competition authorities there sought intellectual-property concessions that went beyond China's demands, according to people familiar with the discussions. Microsoft tweaked the transaction to exclude a Nokia factory in South Korea and then closed the deal in April, deciding it didn't need the country's pre-merger approval. The country is still investigating the deal, and the two sides are in settlement talks.

U.S. antitrust officials are watching international developments and urging agencies to adopt consistent and transparent approaches that treat companies fairly. "What we want to make sure is that the analysis being employed is grounded in sound antitrust principles and economic analysis," says Federal Trade Commission Chairwoman Edith Ramirez, whose agency shares antitrust authority with the Justice Department.

With an expanding roster of countries in the merger-review game, one of the big challenges for companies is to figure out which nations can claim authority over their deal, a complicated endeavor because country guidelines are, literally and figuratively, all over the map—depending on the size of the deal, the size of the companies and the amount of commerce connected to a given jurisdiction.

"Every major law firm has a checklist, which often runs from Albania to Zimbabwe, and you have to work your way down that list, jurisdiction by jurisdiction," says William Blumenthal of Sidley Austin LLP, former general counsel at the FTC.

In one recent transaction, Mr. Blumenthal received a 5 a.m. phone call in which corporate lawyers needed to confirm, before an imminent merger agreement was signed, whether the deal would be subject to review in Colombia. It was.

Stephen Axinn of Axinn, Veltrop & Harkrider LLP recalls a multibillion-dollar energy industry transaction in which the companies were concerned about potential delays if their deal had to be reviewed in Equatorial Guinea. At the end of the day, they didn't have to file there and the deal went forward.

The number of antitrust regimes "is startling," Mr. Axinn says. "Fifteen years ago, we wouldn't be having this conversation. Most of this has occurred in the last 10 years."

Some jurisdictions have developed reputations as a headache for companies, including Ukraine, which, despite internal political turmoil, has ratcheted up enforcement the past few years. "They are active enforcers for a relatively young jurisdiction," says George Paul of White & Case LLP, co-author of a book on global merger regulations.

Antitrust lawyers say Ukraine's review process can be difficult to navigate and can snag transactions that have only loose ties to Ukrainian commerce. Businesses face large potential fines if they don't comply. A representative for Ukraine's Antimonopoly Committee said the agency was "operating in the ordinary course" despite the current crisis in eastern Ukraine.

COMESA, which began operations last year and has so far handled 47 mergers and acquisitions, is also emerging as a controversial antitrust player for adopting rules that could snag transactions with minimal connection to the region, and for its high fees.

George Lipimile, director of the COMESA Competition Commission, says his agency is moving toward drastically reducing fees and reconfiguring its rules to meet "international best practices." Having a regional antitrust authority will ease compliance burdens on companies and benefit member countries, whose competition laws aren't sufficient to deal with regional market problems, Mr. Lipimile says.

Simply bypassing smaller jurisdictions and not filing merger papers can carry its own costs: Kenyan competition authorities referred French research firm Ipsos SA IPS.FR -0.89% for criminal investigation in 2012 because the company hadn't submitted a 2011 acquisition for regulatory approval. Kenyan officials said the company Ipsos bought, research firm Synovate, had a strong presence in Kenya. Penalties can include jail time.

A spokeswoman for the Competition Authority of Kenya said the matter was still pending. David Somers, chief executive of Ipsos in Africa, said the company "has assisted them with all their inquiries" and provided them with "all the requisite information that should have been provided" before the deal happened.

Though issues can arise in far-flung jurisdictions, companies are prioritizing their focus on antitrust enforcement in the largest emerging markets, where the economic stakes are high. China, whose antimonopoly law went into effect six years ago, is at the top of that list.

Chinese antitrust clearance can be the last approval to fall into place, and enforcers there on several occasions have imposed conditions on merging companies that weren't required in other jurisdictions. China also recently blocked an alliance formed by three European shipping lines, even though it had been approved in the U.S. and Europe. Chinese shipping companies had worried they would be harmed by the deal.

Brazil and India are also points of focus for corporations. Brazil's new merger law, which went into effect in 2012, prevents deals from being consummated before they get proper regulatory approval. India's new merger regime, launched in 2011, could face its first big test during the country's examination of Sun Pharmaceutical Industries Ltd. 524715.BY +1.57% 's proposed acquisition of generic drug maker Ranbaxy Laboratories Ltd. 500359.BY +1.37% From Africa to Ukraine, Deal Police Proliferate - WSJ

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  #27 (permalink)  
Old 6th October 2014, 16:51
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Poroshenko, Nuland discuss bigger macrofinancial aid to Ukraine
Oct. 6, 2014, 6:12 p.m. | Ukraine — by Interfax-Ukraine
Ukrainian President Petro Poroshenko and U.S. State Department Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland on Oct. 6 in Kyiv discussed boosting U.S. macrofinancial aid to Ukraine.

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Old 11th October 2014, 23:18
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Aviation Giant Is Nearly Grounded in Ukraine

KIEV, Ukraine — The sprawling campus where the Antonov company once designed and built prototypes of the world’s largest transport aircraft — flying whales whose very bulk symbolized Soviet might — lacks buzz these days.

A few derelict airplanes sit along the weed-choked apron connecting its huge construction hangars; cats saunter through the muted assembly shops; flight simulators sit empty.

The crisis with Russia that erupted in February terminated Antonov’s most promising, albeit already troubled, joint venture: a short-takeoff, heavy-lift plane that the Russian military had sought for years.

Antonov was not alone. With the rupture, Ukraine, among the world’s top 10 arms exporters, lost the market that spurred the development of its military industry.

Economic and military experts said Antonov’s troubles epitomized the twin problems plaguing state-run companies in Ukraine, particularly the military sector, as it tries to slip Russia’s gravitational pull and hitch its fortunes to Europe.

First, Ukraine inherited flagship industrial plants like Antonov with the disintegration of the Soviet Union in 1991, but neither the government nor the companies tried to reorient sales. Russia remained the primary focus, so this year’s rift set scores of companies adrift.

Second, state-run firms never abandoned their love of central planning. Antonov and other companies avoided shattering the Soviet organizational model, still awaiting state requisitions. Even now, experts noted, Antonov is locked in a bitter, paralyzing court battle over which arm of the Ukrainian bureaucracy controls it.

“Antonov is Ukraine’s calling card. It built the most powerful transport planes that beat all the world records,” said Valentyn Badrak, an independent Ukrainian military analyst. “Losing it would be like cutting off an arm.”

The government should sell shares and order many planes to ensure that Antonov survives, Mr. Badrak said, adding: “The issue of developing Ukraine’s aircraft industry is beyond the capacity of Antonov’s management. It depends on the government.”

With the signing of a cease-fire in early September, attention is shifting from the war for control of southeastern Ukraine to the country’s economic crisis, which is severe. The economy is expected to shrink by more than 6.5 percent this year, according to the International Monetary Fund, which is keeping Ukraine afloat with an $18 billion loan over the next two years.

Yet, at just under 50 percent, government spending as a percentage of gross domestic product is among the highest in the world — and an indication of how far the government has to go to establish something like a free-market economy.

Antonov might be considered Exhibit A of the problems Ukraine must overcome.

Oleg Antonov, a Russian flight enthusiast, organized an airplane design company owned by the Soviet state in 1946 and directed it until 1984. He had a knack for making hardy passenger planes that could survive crude, often unpaved Soviet airfields. The Soviet government asked him to create military transport planes, and for a time, Antonovs formed the bulk of the fleet.

In the 1980s, two planes — first the Antonov-124 Ruslan and then the even bigger Antonov-225 Mriya — lifted record-breaking cargoes. With their trademark open noses, they have transported rockets and railroad cars and battle tanks. Designed as the Soviet Union waned, only one AN-225 was ever built.

While design was done at the Antonov complex in Kiev, production was scattered across the former Soviet Union. (Antonov did not start building planes commercially until 2009, when the government merged it with a failing state-run aircraft builder.)

Lately, though, the company has fallen on hard times. By its own account, Antonov built just four airplanes last year: three small passenger jets for Cubana, Cuba’s national airline, and one for North Korea’s Air Koryo. So far this year, it has delivered only two more small planes to Cuba.

Six planes in various stages of construction sit in the vast assembly hangar here, but the company is unsure about buyers for most of them. Despite the slowdown, it still has 13,000 employees of its own, while an estimated 70,000 Ukrainian workers at other factories build parts for it.

Antonov was supposed to test a prototype of a new transport plane, the AN-178, in 2014, but has yet to receive the engines, which are made elsewhere in Ukraine. The company would be better off buying engines outside Ukraine, Mr. Badrak and others have said, but powerful business interests blocked that.

Antonov employs some impressive engineers who rattle off complicated technical data in fluent English, talking about digital design and composite fuselage materials. Yet the place exudes a certain retrograde air. In the assembly hangar, the black phones on the work tables have rotary dials.

Some Antonov traditions endure. Small passenger jets like the AN-148 still sport engines mounted about a yard higher than Western airplanes, to avoid sucking debris off the ground.

“Russia, China and Kazakhstan have a lot of not-so-good airfields,” said Viktor N. Kazurov, the project manager for the AN-148, noting the design would be useful for bad runways anywhere.

Company officials talk about seeking new markets and cashing in on its high international profile, and some years ago, Antonov did license a plant in Iran to make small passenger jets. But it has been slow to develop new customers, experts said.

The defense industries in Russia and Ukraine remained interdependent after the Soviet Union collapsed, and right up until this year, raw materials and manufactured parts flowed back and forth across the border. Ukraine built few wholly independent weapons systems. At this point, Russia and Antonov still could not build planes without the other, experts said.

The Kremlin first announced in the 1990s that Russia would produce all military equipment domestically, but it never did. The country received 4 to 7 percent of its military supplies from Ukraine annually. Trade continued unabated this year, even after Russia attacked Ukraine’s Crimea Peninsula.

Finally, on June 17, the Ukrainian president, Petro O. Poroshenko, ordered all military sales to Russia halted.
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In its best year, 2013, Ukraine’s state-run military enterprises sold nearly $2 billion in arms globally, Mr. Badrak said. Russia bought 15 percent, the third-leading customer after China and Pakistan. Sales by private companies added even more.

Perhaps most important, Ukraine manufactured critical, technically complex equipment for Russia that cannot be rapidly duplicated — helicopter engines, gas turbine engines for warships and key missile components, as well as Antonov aircraft designs.

Yet the Kremlin, Antonov executives say, wanted to maintain ownership of the advanced designs, even though they were developed by the company. The history of the ill-fated Antonov-70 — a four-engine, wide-body military transport plane — illustrated the problem.

In development for more than two decades, the plane endured several design phases as Russia asked Antonov repeatedly for changes like more modern avionics. Eventually Russia committed to buying 60 aircraft, and the Ukrainian military ordered two. Production was to be divided between both countries. But disagreements continued to plague the venture, so it was suspended 18 months ago, said Dmytro S. Kiva, 71, the current Antonov president.

The root problem was that Russia wanted to own the intellectual property rights for a plane that Antonov designed. “They wanted to control it,” Mr. Kiva said. “They saw Antonov as part of the Russian Federation.”

Critics say Antonov is now on life support, living off the $200 million in revenue earned annually by a subsidiary that leases giant AN-224 transport planes to NATO and other customers.

The company conceded that the leasing revenue is important, but said it earned between $300 million and $400 million annually from leasing and other activities, and that trade with Russia accounted for just 10 percent. Antonov still builds civilian aircraft jointly with Russia.

What Ukraine really needs, many experts said, is a different mind-set, particularly in the estimated 40 percent of economic production that the state runs.

“Many of those old-style managers are unable to accept the reality,” said Pavlo M. Sheremeta, who resigned as Ukraine’s minister of economy in August over the slow pace of reform. “They would cry and shout and yell, ‘Support us, don’t cut the ties, don’t be enemies with Russia,’ as if we annexed Russian territory.”

Antonov, at a time when experts believe it should be focused on finally escaping its Soviet past, instead captured headlines in September when a president newly appointed by the Ministry of Industrial Planning summoned the police to try to force his way into the plant past employees who liked their current boss and wanted a voice in choosing any new leader.

In a management dispute worthy of “Alice in Wonderland,” the company maintains that the Ministry of Industrial Planning — its very name redolent of Soviet ways — cannot appoint a new president because the agency was abolished after the February revolution.

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