Ukrainian businessman Mishalov: Seeking IPOs in Ukraine, but open to selling businesses

Viacheslav Mishalov, co-owner of E-Groshi (a micro-lender) and internet provider Fregat, dreams of launching an IPO in Ukraine, but says he's also prepared to sell his businesses, he told Interfax-Ukraine.

Creating a market for minority shareholders and enabling IPOs is vital for economic development, Mishalov said, noting the competition it brings against financial institutions and the democratizing effect of raising money from many small investors.

"IPOs partially remove intermediaries, forcing banks to compete in different economic sectors. Businesses gain market capitalization, which today is lacking in Ukraine – they are valued by cash flow alone, except for rare IT firms online," he explained.

Mishalov envisions businesses scaling faster with access to capital markets and advocates for laws protecting majority shareholders as capital is opened up through minority stakes of 5–10%.

Currently owning more than 25% in all his businesses, he criticizes weak minority shareholder legislation, describing it as a matter of economic security, not personal preference.

He is willing to sell companies including E-Groshi, ranked 6th–8th in its sector, and Fregat, among Ukraine's top five ISPs behind the mobile giants and Ukrtelecom. Given market consolidation and cheap, high-quality internet, he predicts Fregat will be sold eventually.

For E-Groshi, he is also open to exit but feels unprepared to take on the sector's risks, especially amid volatile tax environments.

"You look at the numbers – larger players pay less tax. That's puzzling – how do you compete?" he remarked.

Mishalov maintains that every business should be sellable – "If it can't be sold, it's not a business." His assets are structured under the non-diversified venture corporate investment fund Fortetsia, managed by KUA MPSS in Dnipro, owned by Serhiy Shyshkin (50%), Ihor Sukhodolsky (41%), and Olha Mukhina (9%). Current investments include E-Groshi, Fregat, Lotus gas station chain, Lotus Oil Trading, an IT business, and news portal Informator.

"I don't have my own asset management company – I run everything through the fund. I think it's one of the best tools today for ownership and managing financial flows," he concluded.