Vyacheslav Boguslaev, president of Motor Sich, confirmed on December 13 the sale of the Ukrainian aviation engine manufacturer to Chinese investors, the news agency Ukrinform reported. But the takeover is “still under review” until February, officials told the Kyiv Post on December 16.
“I could close the plant, I could cut the number of employees. That was the problem before me. So we decided to find an investor. We were told who the investor was, we went to China and talked. The owners of the stock sold it through our stock exchange, and I sold my shares,” Boguslaev said.
The sale of Motor Sich, which manufactures aviation technology as well as industrial gas turbines, has been opposed by the United States, which argues it could boost China's military forces. In particular, Motor Sich produces the ZMBK Ivchenko-Progress D-18 turbofan which powers variants of the An-124 and An-225 freighters. China has been linked to the purchase of the program from Antonov Design Bureau (Gostomel) through the Aerospace Industry Corporation of China (AICC) which aims to restart the An-225's production.
Motor Sich's subsidiary Motor Sich Airlines (M9, Zaporizhzhia) operates scheduled and charter passenger and cargo services. According to the ch-aviation capacities module, its four scheduled routes link Kyiv Igor Sikorsky with Zaporizhzhia (12x weekly), Lviv and Odesa (each 6x weekly), as well as Zaporizhzhia and Minsk National (4x weekly).
Boguslaev claimed the Chinese had pledged to invest USD250 million in the plant over two years: “They gave us USD100 million. [...] Another USD150 million will come next year. If we hadn't found it, you would not be standing here and I would not be talking to you,” he told Ukrinform.
Skyrizon Aircraft and Xinwei Technology Group have reportedly already acquired more than 50% of Motor Sich's shares, according to Ukrinform. In the event of approval by the purchase by the Anti-Monopoly Committee of Ukraine (ACMU), the investors have pledged a grant of USD100 million.
More than 25% of the shares remain with the state-owned defence group UkrOboronProm, whose chairman confirmed that Chinese investors had bought shares in Motor Sich and that the deal was currently under review by the anti-monopoly committee.
Competition regulators confirmed to the Kyiv Post that they have the final say on the deal.
“It is still under review. The case is still open at least until the end of January,” said Yuriy Terentyev, the ACMU's chairman, adding that the committee was waiting for UkrOboronProm to provide further data on the proposed investment.
