How Ukrainian business braces for the potential Russian invasion

In January, the European Business Association (EBA) interviewed 136 CEOs of its members to find out how business in Ukraine is preparing for possible Russian aggression.

According to the EBA, 45% of companies (including TRUMAN) will continue to operate even amidst full-scale conflict. Only 17% are considering moving to the western regions of the country.

Investment banker Sergey Fursa approves of this trend advising business to behave as it was planned before.

Nevertheless, 40% of EBA respondents have already prepared a contingency plan. Мost founders are primarily interested in:

a) safety of employees, their families, and customers,
b) security of assets and data,
c) stable operation of telecom, banks, land transport.

Anyway, people are in the first place, say business owners. Only 14% of companies are planning job cuts or unpaid holidays.

A study by law firm Sayenko Kharenko, in turn, showed that 84% of Ukrainian business involve external advisers and providers in crisis preparations. Only one sixth will do everything on their own.

Among the most popular anti-crisis preparations, experts highlight:

a) expanding the staff database,
b) creating an emergency fund,
c) rethinking risks (power outages, looting, jamming, etc.),
d) drawing up a detailed evacuation plan as well as replacement strategy for workers to be called up.

Currently, there is a caste of entrepreneurs in Ukraine who have already defended their homeland in the trenches. Representatives of the Veterano Group, founded by the participants of the Donbass war, have already hatched crisis plans and are ready to delegate authority if necessary.

Still, founders would not “sit around”. Roman Nabozhniak, the father of Veterano Brownie, says that in the worst-case scenario, he will run a corporate Instagram page and perform military service in parallel.

Western business is more prone to panic. According to experts, foreign companies that have already begun preparations for the crisis are 13% more than Ukrainian ones.

Recently, President Zelensky even claimed Western media headlines on a possible Moscow’s invasion to have caused the withdrawal of more than ₴12.5 bln from Ukraine. It should be noted though that Zelensky was talking about portfolio investors getting rid of Ukrainian bonds under the pressure of recent news.

But the negative impact is still insignificant. The figures voiced by the President are not critical. At the end of 2021, for example, Ukraine's debt on securities issued on the external market was ₴625 bln.

Some experts, including Sergey Fursa, even find such a situation useful.

"First of all, Ukrainian Ministry of Finance has bought part of the debt, which it will have to repay in September, much cheaper than the nominal value. Moreover, besides the Ministry of Finance, Ukrainians began to buy actively Ukrainian Eurobonds back. It breathed life into Ukrainian stock market,” says Fursa.