A new privatization auction for the sale of the Bilhorod-Dnistrovskyi Commercial Sea Port (NCSP, Odesa region) is scheduled for March 13. The starting price of the property has been halved from UAH 187.57 million to UAH 93.78 million, according to the property’s page on the State Property Fund’s website. According to the published information, the acceptance of bids from buyers will end at 20:00 on March 12, and the next day at 12:30 an English auction will be held with a minimum bid step of UAH 937,871.2.
As reported, the first auction for the sale of the port with a starting price of UAH 187.57 million scheduled for March 3 did not take place, the probable reason for the failure of the auction is the absence of at least two bids.
Earlier, the Fund noted that the port is unprofitable, but since 2022, the company “plays an important role in ensuring global food security as a logistics center for ports on the Danube.” According to the head of the SPF, Rustem Umerov, the port has great potential for the development of Ukrainian exports and needs investment in development.
According to the SPF, in 2019-2021, the net loss of the Bilhorod-Dnistrovskyi ICC amounted to approximately UAH 23.5-28.5 million, and in January-September 2022 – UAH 2.9 million. The volume of sales of products (works, services) for the period of 2019-nine months of 2022 amounted to UAH 80.8 million, including UAH 9.2 million for export.
The total overdue accounts payable amounted to UAH 104.6 million, including UAH 13.66 million in salary arrears. As of December 1, 2022, the debt to the State Tax Service amounted to UAH 59.6 million, including UAH 57.9 million in tax debt and UAH 1.7 million in penalties.
The terms of the port sale stipulate that the port must pay off its wage and budget arrears within six months in the amount that will be available as of the date of transfer of ownership of the privatization object. In addition, during the same period (six months), the employees of the privatized enterprise may not be dismissed at the initiative of the buyer or its authorized bodies, except in cases where the employee commits actions provided for in paragraphs 3, 4, 7, 8 of Part 1 of Articles 40 and 41 of the Labor Code.
Since April 1, 2022, Bilhorod-Dnistrovskyi seaport has been used as a logistics center for ports on the Danube. It receives cargo by truck and then ships it in railcars. In May of the same year, the company started shipping grain, transshipping iron ore pellets and transshipping metal products. In the six months after the reopening, cargo transshipment at the MTP increased 100 times compared to 2021. The port received more than 10 thousand trucks and shipped 4 thousand railcars by rail, which significantly eased the load on the country’s road infrastructure to the ports of Izmail and Reni (Odesa region). All products were exported.
Founded in 1971, Belgorod-Dniester Commercial Sea Port specializes in transshipment of timber, mineral fertilizers, iron ore pellets, metal products, and grain cargo. According to its charter, its core business is auxiliary water transport services.
The port’s balance sheet includes nine vessels of the port fleet, 47 units of road and 4 units of rail transport, 18 portal cranes and special equipment: 41 forklifts, four excavators, three bulldozers, a pneumatic crane, and a compressor. A part of the port’s property (28 items, including real estate and vehicles) is leased with the expiration date of the existing lease agreements being 6.09.2027. The port has six registered land plots with a total area of 65.63 thousand hectares.
According to the decision of the Odesa Customs Service, a temporary customs control zone has been established on the territory of the port facilities.
Vessels enter the port through the 1.5 km long approach channel of the offshore part of the Dniester-Tsaregorod estuary and the 14.5 km long Dniester-Liman part. The depth of the approach channel is 3 m (passport depth is 3.4-4.5 m). The single property complex is located on the territory of 64.4 hectares at the following addresses: 81 Shabska Street, Bilhorod-Dnistrovskyi, Bilhorod-Dnistrovskyi district, Zatoka village, 93 Zolotyi Bereg Street, Bilhorod-Dnistrovskyi district, Zatoka village, 1 Primorskaya Street.
Earlier, the SPF sold the integral property complex of the Ust-Dunay port for UAH 200 million on the Prozorro electronic platform. During the auction, its price tripled.
The State Property Fund of Ukraine (SPF) wants to be transformed into the Sovereign Fund, a state asset management fund, Rustem Umerov, who has been appointed its head this week, said.
“We will perform the functions of selling through privatization, through leasing. But we are also considering expanding the mandate in order to create the State Asset Management Agency, so that we can see that strategic assets will be in the fund, will be managed by it,” he said.
According to Umerov, privatization will continue and the fund would like to become “a good contributor of the government in terms of income.”
The State Property Fund (SPF) has issued an order on the privatization of the power generating company PJSC Centrenergo.
“By order of the State Property Fund No. 1275 dated July 23, 2021, the decision was made on the privatization of a state-owned enterprise – a state-owned stake of shares in the amount of 78.289% of the charter capital of the public joint-stock company Centrenergo. These are 289,205,117 shares,” the SPF said in a statement on its website on Monday.
According to the order that approved the plan for the placement of shares, the stake of the power generating company is planned to be placed at an auction with conditions from August 2 to December 31, 2021.
The SPF’s large privatization department shall ensure the creation of an auction commission and a competitive selection of an advisor to prepare for privatization and the sale of the stake.
The auction commission for the sale of PrJSC United Mining and Chemical Company with a starting price of UAH 3.7 billion has set a date for the privatization auction, which will take place on August 31, 2021, Head of the State Property Fund (SPF) Dmytro Sennychenko has said.
“Preliminary interest in the object was expressed by a wide circle of investors, part of whom is foreign. We hope for a high competition and a market price of the sale at a transparent auction,” he wrote on Facebook.
United Mining and Chemical Company state enterprise began its actual activity in August 2014, when the government of Ukraine decided to transfer to its management the property complexes of Vilnohirsk Mining and Metallurgical Plant (Dnipropetrovsk region) and Irshansk Mining and Processing Plant (Zhytomyr region). Then it was transformed into PJSC, and then – into PrJSC.
Former head of United Mining and Chemical Company Oleksandr Hladushko has denied allegations of withdrawing funds from the company by its incumbent management.
In a comment to the Interfax-Ukraine agency he claims that there were no overdue receivables for products at the time of transfer of control to the new management in February 2020.
“For a year now, United Mining and Chemical Company has been managed by new managers. And suddenly we learn about a debt of $ 38 million for 2019, they have been modestly silent about all this time? This alogism can only be explained by the fact that on the eve of privatization, the team of Artur Somov [the incumbent head of the company] is trying to shift responsibility for their managerial mistakes onto their predecessors,” the report says.
According to Hladushko, at the time of his team’s departure from the company, it was profitable and financially secure: by the end of the first quarter of 2020, it received UAH 245 million in net profit, the balance of payments of the enterprise was positive.
“By January, the company’s accounts had over UAH 405.3 million. This was enough to keep production and supply running smoothly, pay salaries, and taxes for three to four months,” the ex-head says.
Commenting on the news about the shutdown of Vilnohirsk GOK in May 2020 and non-payment of wages to miners, and later – about production downtime due to an unstable financial support, Hladushko expressed opinion that the above funds were spent, and new ones were not earned, which led to cash breaks in the company.
The ex-head also named among the achievements of his team the growth of income of the company almost twofold – up to UAH 3.5 billion, payments to budgets almost fourfold – up to UAH 1.4 billion, investments in production by 8.3 times, up to UAH 749.6 million, as well as an increase in the value of assets by more than four times – up to UAH 3.4 billion.
Acting chairman of the board of United Mining and Chemical Company Artur Somov said earlier that the company intends to collect $ 38 million through the International Commercial Arbitration Court under contracts with the companies Bollwerk Finanzierungs- und Industriemanagement AG (Austria) and Defessa Trans F.Z.E (the UAE), through which the ex-management of United Mining and Chemical Company laundered funds from the enterprise.
Earlier, PrJSC United Mining and Chemical Company, which managed Vilnohirsk Mining and Metallurgical Plant (Dnipropetrovsk region) and Irshansk Mining and Processing Plant (Zhytomyr region), initiated the process of collecting a debt of $ 38 million, according to the company, withdrawn by the previous management.
The state enterprise United Mining and Chemical Company began its actual activity in August 2014, when the government of Ukraine decided to transfer the property complexes of Vilnohirsk and Irshansk GOKs to it. On December 8, 2016, the state enterprise was transformed into PJSC United Mining and Chemical Company, on December 26, 2018 – into PrJSC.
United Mining and Chemical Company sells its products to more than 30 countries of the world. The main sales markets are the EU, China, Turkey, as well as the United States and African countries.
In August 2016, the government included United Mining and Chemical Company in the list of companies that are subject to privatization in 2017. Its terms were postponed several times, most recently due to the coronavirus crisis and quarantine. BDO Corporate Finance as part of the consortium Baker McKenzie, Baker Tilly Ukraine and Asset Expertise, prepares the company for privatization.
The management of the SPF proposes to put United Mining and Chemical Company up for sale in the first half of this year, declares about 15 applicants for the enterprise and predicts the starting price of the object from UAH 3 billion to UAH 5 billion.
The State Property Fund (SPF) is discussing the possibility of doubling the plan of privatization receipts in 2021, to UAH 12 billion, with the lawmakers and the government of Ukraine, Head of the SPF Dmytro Sennychenko has said.
“The plan, which has now been submitted in the government budget to the Verkhovna Rada for receipts from privatization in 2021, is set at [UAH] 6 billion. We are now communicating with members of parliament, the government and clarifying the budget indicators for next year. We will propose its increase … up to [UAH] 12 billion,” he said at a press conference at Interfax-Ukraine on Tuesday.
Sennychenko said that the SPF has drawn up a list of facilities for privatization for the next year, which includes regional gas supply companies, the Bilshovyk plant and the United Mining and Chemical Company (UMCC).
He said that at the start of the “coronavirus crisis” in March 2020, the Verkhovna Rada lowered the bar for budget receipts from privatization to UAH 500 million, specifying that in 2020 the SPF exceeded it. At the moment, proceeds from privatization are UAH 2 billion, and by the end of the year they are expected to reach UAH 3 billion, the head of the fund said.
“This [the amount of proceeds] will also depend on the necessary financing steps, because one hryvnia invested in the audit of the creation of technical documentation today gives us UAH 71 of budget receipts from privatization. The most important thing is not the funds received from the sale of a facility, the most important thing is the cumulative effect that a private investor gives after investing in the subsequent development of this facility,” he said.
According to Sennychenko, this year the SPF has held more than 1,400 auctions and prepared an “investment menu” for the next year “for every taste.”
