The government has amended the regulations necessary for further privatization of the unified property complexes of state-owned enterprises Ichnianskyi Distillery (Chernihiv region) and Chervonenskyi Food Product Plant (Chervone village, Zhytomyr region).
“According to the decision taken at the Cabinet of Ministers meeting on December 12, the State Property Fund received grounds to stop the reorganization of these plants and the opportunity to privatize them,” the Ministry of Economy said in a statement on Wednesday.
The ministry reminded that the government resolution of October 28, 2010, approved the reorganization of these two plants by merging them with the state-owned Ukrspyrt. However, the reorganization processes have not been carried out, and both are in a state of legal entity termination.
It is specified that in January 2003, the Ichniansky Distillery received permission to start producing high-octane oxygen-containing gasoline additives. The plant also produced ethyl alcohol (including rectified alcohol, Extra alcohol, Lux alcohol, and technical alcohol), as well as isoamyl alcohol for the needs of the chemical industry and bard, and alcoholic beverages. In 2014, it was no longer in operation.
“According to the Ministry of Economy, Krasnenskyi Food Product Plant is capable of producing organic solvents, glass cleaning liquids based on alcohol production technology, as well as alcohol, alcoholic beverages, liqueurs, fruit drinks, liqueurs, and juices. The raw materials used are molasses (molasses), sugar beet processing waste, and grain.
The State Property Fund of Ukraine (SPF) this year plans to complete the full privatization of the alcohol industry, which will hold online auctions for the sale of 26 distilleries across the country.
As reported on the IGF Facebook page on Thursday, for the 2.5 years since the de-monopolization of the alcohol industry there have been 39 successful auctions for the sale of distilleries, which added more than 2 billion UAH to the country’s budget, allowed to attract private investment and reduce illegal production.
“Did you know that not long ago Ukraine had a monopoly on alcohol production? We were one of only two countries in the world that had such a practice. However, in the summer of 2020, the state decided to de-monopolize the industry and began privatizing distilleries. “, – reminded the department.
According to him, before the start of privatization Ukraine spent about 200 million UAH a year for the maintenance of unprofitable factories. An even bigger problem was shadow production, which amounted to 55% in 2019.
The fund specified that in the 39 completed privatization auctions participated 133 entrepreneurs, as a result, due to competition, the value of the proposed assets increased by an average of 2.4 times.
“Not only alcohol producers are interested in buying distilleries. Pharmaceutical companies, producers of motor fuel and agricultural companies interested in processing their own products also take part in the auctions,” emphasized the FGI in its report.
As reported, in September-December 2022 the SPF held 12 auctions for the sale of distilleries. The auction winners offered more than 849 million hryvnias for these facilities, which is three times more than their total starting price. Thus, distilleries became one of the most popular destinations for investment in state property last year.
In December 2022, “Averbud Ltd.” (Chystyliv village, Ternopil region.) won the right to privatize part of the property of the state enterprise “Myshkovitsy Distillery” (Terebovlyansky district, Ternopil region.), namely the distillery in Chortkiv (Ternopil region.).
At the beginning of January 2023, the Antimonopoly Committee of Ukraine allowed Timekol LLC (Kiev) to privatize Borschevsk distillery (Ternopil region), which is a part of the state enterprise Ukrspirt. The company won the right to buy the distillery for 17.7 million UAH at an online auction in October 2022.
In addition, on January 12, LLC “Es Oil” (Lviv) won the right to privatize Starobabskyi distillery with assets in five regions of Ukraine for 142 million UAH, and on February 6 LLC “Agroprompererobka” (Karbivka village, Vinnitsa region) won the auction for the privatization of Vashkovskiy distillery (Vashkivtsi Chernivtsi region) for 1.99 million UAH.
The Antimonopoly Committee of Ukraine (AMCU) allowed Aqua Solar Invest LLC (Bershad, Vinnytsia region) to purchase Kobylovoloki distillery (Kobylovoloki village, Ternopil region), which is part of Ukrspirt, and Vitagro Energy LLC (Gvardeyske village, Khmelnitsk region) was allowed to purchase the Marylivsky distillery (Nagirnyanka village, Ternopil region) from Ukrspirt.
The Committee approved the corresponding permits for the privatized assets at its meeting on December 1.
LLC “Aqua Solar Invest” won the right for privatization of Kobylivolokskyi distillery for UAH 70,25 mln on September 19, 2022.
According to the Unified State Register of Legal Entities and Individual Entrepreneurs, the ultimate beneficiaries of “Aqua Solar Invest” with a registered capital of 25 million UAH are Alexander Yaroshenko (25% in the share capital), Lilia Astapova (25%) and Elena Smirnova (25%), while until December 2020 the company was fully owned by Felix Lutsky. The legal entity is engaged in distillation, rectification and blending of alcoholic beverages, while before January 2021 its line of business was real estate trade.
This company already has experience in privatization of assets of state enterprise “Ukrspirt” – in October 2020 it won the online auction “Prozorro.Sells” the right to privatize Bershadskyi distillery for 19.81 million UAH, and in early February 2022 closed the deal to purchase it, having received permission of the AMCU.
The immovable property of the Kobylivolok distillery to be privatized with a total area of 11.5 thousand square meters is located on seven plots of land in Terebovlyansky district of Ternopil region with a total area of 36.95 hectares. The plant includes production buildings, granary, distillery, hangars, pumping stations, greenhouse, starch and malt shops, gas station, etc., as well as the technological equipment and the necessary communications.
The daily capacity of the distillery is 2.7 thousand dal of ethyl alcohol. The company was founded in 1905 and modernized in 2016. Production at the facility has been temporarily suspended.
In turn, Vitagro Energy won the right to privatize Marylivskyi distillery for UAH 150 mln on September 20, 2022.
According to the Unified State Register of Legal Entities and Individual Entrepreneurs, the ultimate beneficiary of Vitagro Energy LLC with a registered capital of 10 thousand UAH is Serhiy Labaziuk, a member of parliament (the Za Maybutne parliamentary faction). The main activity of the company is the production of electricity, but the legal entity may also engage in the cultivation of root crops and melons, as well as auxiliary activities in crop farming.
The company is part of the large Vitagro holding, which is engaged in the production and processing of crops, including fruits and vegetables, dairy farming and pig breeding. The Group cultivates about 85 thousand hectares of land in Khmelnytsky, Ternopil and Rivne regions and has a livestock of 110 thousand pigs.
According to Vitagro’s website, Vitagro Energy was founded in 2018 to develop renewable energy projects. The company has four solar power plants in the Khmelnitsky region on a total area of 29.5 hectares with a total capacity of 12.9 MW, and also works with other sources of renewable energy, such as wind and biomass.
The Marylivsky distillery is located in the village of Nagirnyanka, Chortkivsky district, Ternopil region. The list of assets includes 1518 items of buildings, equipment, movable and other property.
The enterprise is located on three land plots with a total area of 26.6 hectares and consists of an administration building, seven production shops, a bard storage facility, a starch workshop, greenhouses, hangars, warehouses for grain, finished products and alcohol, as well as other constructions and infrastructure facilities.
The distillery was founded in 1928, the maximum production capacity in 2009 was 7300 thousand dal per day.
Thus, the privatization of these two assets of Ukrspirt will allow the State Property Fund of Ukraine to transfer 220.25m dollars to the state budget.
The first two objects for which privatization auctions have been announced since the beginning of the war were the Marilovka and Kobylovolotsk distilleries of the Ukrspyrt State Enterprise in the Ternopil region, the State Property Fund reported on Monday evening.
According to it, auctions for the Kobylovolotsk plant will be held on September 19 with a starting price of UAH 25.2 million, for the Marilovka plant on September 20 at a starting price of UAH 54.3 million.
In total, in September it is planned to hold 8 auctions for the privatization of ready-made alcohol assets, as well as about 150 other objects – from movable and immovable property to non-operating plants, which will be put up before the end of 2022.
“Privatization auctions in September will be held according to new, improved procedures. Thanks to our joint work with people’s deputies and the government, colleagues from Prozorro. Sales, privatization will become an even more convenient tool for business development and will provide additional filling of the state budget in the conditions of martial law “, – the words of the acting are given in the message. head of the State Property Fund Olga Batova.
She recalled that due to legislative changes, the preparation and holding of auctions will take up to two months instead of six, payment will be made before the signing of the sale and purchase agreement to minimize risks, but new owners will receive all permits and licenses automatically.
The State Property Fund of Ukraine (SPF) on November 27, 2020 announced the holding of auctions for the privatization of Vyshniakivsky (Poltava region, alcoholic drinks production), Tkhorivsky (Kyiv region), Kobylovolotsky (Ternopil region) and Velykoliubynsky (Lviv region) distilleries of the state-owned enterprise Ukrspyrt.
According to the press service of the State Property Fund, the online auction for the privatization of Vyshniakivsky distillery will take place on December 21, the starting price is UAH 9.88 million; Tkhorivsky distillery – December 22, the starting price is UAH 22.46 million, Kobylovolotsky distillery – December 23, the starting price is UAH 25.95 million, Velykoliubynsky distillery – December 24, the starting price is UAH 29.97 million.
As reported, President of Ukraine Volodymyr Zelensky on December 11, 2019 signed a law on abolishing state monopoly on alcohol production from July 1, 2020, adopted by the Verkhovna Rada on December 3, 2019.
The debut auction for the privatization of the first object of the state-owned enterprise Ukrspyrt, Nemyriv distillery (Vinnytsia region), was held on October 15. The plant was sold to LVN Limited LLC, the shareholders of Nemiroff for UAH 55.08 million, which is UAH 5 million higher than the starting price. The winning company was the only one to apply to participate in the auction.
On the whole, starting from October 15, eight Ukrspyrt’s plants have been successfully privatized at online auctions. Two auctions did not take place. As for the distilleries, they will be put up for re-bidding with a reduction in the starting price.
The SPF expects to attract about UAH 2 billion from the privatization of distilleries of the state-owned enterprise Ukrspyrt and the concern Ukrspyrt.
The State Property Fund of Ukraine (SPF) on November 4, 2020 announced the holding of auctions for the privatization of Dovzhok (Khmelnytsky region), Zaliztsi (Ternopil region) and Martynivka (Vinnytsia region) distilleries of the state-owned enterprise Ukrspyrt.
According to the SPF’s press service, the online auction for the privatization of Zaliztsi distillery will take place on December 2, Dovzhok distillery on December 3, and Martynivka distillery on December 4.
“The privatization of these assets is taking place within the framework of demonopolization of the alcohol industry and in order to create a market for alcohol on a competitive basis. Investing in alcohol assets through privatization is an opportunity for their future owners to obtain a license for the right to produce alcohol, which will become a significant competitive advantage for them in the market,” the fund said.
