On February 27, the Commercial Court of the Ivano-Frankivsk region initiated bankruptcy proceedings against Karpatnaftokhim LLC, one of Ukraine’s largest petrochemical producers. The procedure was initiated by state-owned Ukreximbank, which claimed the company owed more than UAH 1.29 billion under loan agreements concluded in February 2021.
In addition to the state bank, Kostanza LLC (Kalush CHP plant) also filed a petition to open proceedings, citing outstanding debt of more than UAH 322.7 million for energy supplies. The total amount of declared claims exceeds UAH 1.6 billion.
The court opened the proceedings and appointed a property administrator — an insolvency officer — whose candidacy was proposed by Ukreximbank.
Karpatnaftokhim: A Key Player in Ukraine’s Chemical Industry
Karpatnaftokhim was established in 2004 on the basis of production facilities of the Kalush-based enterprise Oriana. The plant specializes in the production of chlorine and caustic soda; ethylene and propylene; vinyl chloride; and polyethylene.
Prior to Russia’s full-scale invasion, the company remained Ukraine’s largest producer of PVC and polyethylene, playing a significant role in supply chains for the construction, pipe manufacturing, and packaging industries.
Until 2017, the plant was controlled by the Russian group Lukoil. Following the imposition of Ukrainian sanctions, the asset was sold to the Dutch company Karpaty Chemical B.V., whose beneficiaries became Ilham Mammadov and Ihor Shchutskyi.
After the start of the full-scale war, the enterprise suspended production. In October 2022, the asset was seized as part of criminal proceedings on suspicion of tax evasion and money laundering.
Management of the plant was transferred to Ukraine’s Asset Recovery and Management Agency (ARMA), but the agency failed to implement an effective management mechanism due to legal inaccuracies in the court ruling. Part of the transferred property, it later emerged, did not formally belong to the enterprise. The seizure was lifted in December 2023.
In June 2024, a new co-owner appeared in the ownership structure — businessman Andrii Veselyi from Drohobych, who acquired a 33% stake for less than $1 million. This valuation represented a significant discount compared to the historical value of one of the country’s largest chemical assets.
Media reports linked the release of the enterprise from ARMA’s management and the change in ownership to political influence, including that of Andrii Yermak, then head of the Presidential Office. On November 28, 2025, President Volodymyr Zelensky dismissed Yermak from his position.
What the Bankruptcy Procedure Means
The opening of proceedings marks the start of a formal insolvency process, including:
- recognition of creditors’ claims;
- analysis of the debtor’s financial condition;
- formation of a register of claims;
- potential transition to restructuring or liquidation.
For Ukreximbank, as a state creditor, the case also carries fiscal implications, involving the recovery of more than UAH 1.2 billion in public funds.
Investment and Market Context
The situation surrounding Karpatnaftokhim reflects a broader wartime economic trend: large industrial assets with energy-intensive production remain exposed to heightened risks due to suspended operations, sanctions-related background, corporate governance challenges, complex ownership structures, and ongoing judicial and criminal proceedings.
The future scenario will depend on the position of creditors, the possibility of debt restructuring, and the emergence of a strategic investor. In the event of liquidation, the process could involve the sale of one of Ukraine’s key petrochemical sites at a significant discount.
