19:56 Apr. 12, 2016
One of Ukraine's largest IT-businesses collapses due to foreign currency loan debt
Oleksandr Kardakov, one of the most famous Ukrainian IT-businessmen, says goodbye to his business. In the near future, the largest system integrator in the market 'Information and Computer Technology' (Incom brand) will cease to exist.
In late February, the company began its liquidation procedure. The company's other major asset - 'Datagroup' telecom operator - may soon be sold out to pay off debts. It may be purchased by its current minority shareholder - investment company 'Horizon Capital', co-founded by Ukraine's current Finance Minister Natalie Jaresko.
Incom was founded in 1997. According to some media, in 2013 the Incom share was equal to 14% of Ukraine's system integration market. Datagroup, part of the Incom holding, still remains a strong asset. This is one of the largest market players in the sector of fixed satellite communication and Internet access.
According to IKS Consulting, in 2015 Datagroup controlled 48.5% of the wholesale data transmission market. Kardakov says that Datagroup's estimated turnover for 2015 amounted to about USD 1 billion.
At the end of 2014, Ukrainian Forbes estimated the 2012 total revenue of Kardakov's companies at USD 402 million, and his own capital - at USD 112 million. What happened within a year and a half to get him in trouble? He just could not cope with foreign currency loans borrowed for business development.
"Before the crisis of 2008, we actively attracted loans for new projects. Then it was all good. We saw good growth. I invested the borrowed funds into the development of Datagroup", said Kardakov.
The troubled loan portfolio began to emerge in 2010. Then Horizon Capital purchased a 30% share from the majority shareholder Datagroup. The move was a necessity.
Kardakov's company faced problems serving the USD 30 million debt with the ING bank. The company had to attract an investor, who also became a guarantor for the company's other creditors.
It was not also easy to serve the remaining debt - in 2013 a political, as well as economic crisis, hit Ukraine. In 2015, Kardakov together with Incom minority shareholder Oleksandr Fedchenko decided to liquidate the company.
"What we did in our business before had no future prospects", explained Kardakov.
According to him, last year Incom fully settled with the government - the company paid nearly USD 350,000 of tax compromise, and nearly USD 500, 000 of other taxes. With regard to debts to the banks, the businessman says that "they went on zeroing."