The State Property Fund has completed the valuation of the Ukraina Hotel and plans to hold an auction for its privatization in late summer 2024, and for the Ocean Plaza shopping mall in the second half of the year, Vitaliy Koval, the head of the SPF, said in an interview with Mind.
“We have already completed the valuation of the hotel, which amounts to UAH 1.039 billion excluding VAT. We are now preparing for the auction, which we plan to hold in late summer, maybe even in the third quarter,” he said.
According to the SPF head, foreign operators are interested in privatizing the Ukraina Hotel, in particular, as they are considering upgrading it to a five-star hotel.
In addition, according to him, more than three bidders are considering participation in the auction for the privatization of the Ocean Plaza shopping center, and the Fund has received inquiries from investment funds and development companies.
As reported, the Ukraina Hotel is a state-owned enterprise managed by the SPF. It has 363 rooms, six conference halls, and meeting rooms. There is a parking lot for 80 cars and a shelter with a separate auditorium for 50 people. At the same time, the hotel’s debt is over UAH 45 million.
Ocean Plaza was opened in Kyiv in December 2012 at 176 Antonovycha Street. Its total area is 165 thousand square meters. Investments in the facility amounted to approximately $300 million. UDP and K.A.N. Development LLC acted as partners in the development of the project.
The mall was sold to Arkady Rotenberg’s Russian TPS Real Estate in 2012. Later, in 2019, Ukrainian businessman Vasyl Khmelnytsky indirectly acquired a 33.5% stake in Ocean Plaza through UPD Holdings Limited. In 2021, he sold his stake to entrepreneur Andriy Ivanov. The deal was finalized in the summer of 2023.
In June 2023, the Cabinet of Ministers transferred a 66.65% stake in the authorized capital of Lybid Investment Union LLC, which owns the mall, to the SPFU for further privatization.
The State Property Fund (SPF) of Ukraine has announced a privatization auction for the sale of the Gannopolskiy distillery (Khmelnytskyi region) on January 25, the press service of the agency said.
According to the message, the asset consists of 48 real estate objects located on a land plot with a total area of 16.11 hectares. The main of them are the main building with the area of 1250.9 sq. m, vodka bottling shop and cleaning department – 1392.4 sq. m, stables – 529 sq. m, malt house – 1171.1 sq. m, grain warehouse – 1198 sq. m and others.
The starting price of the object is UAH 3.8 mln.
You can register for the auction until January 24.
The State Property Fund of Ukraine (SPF) has presented a website dedicated to the launch of the Land Bank with the publication of answers to the main questions on land relations, as well as a map with the lands that will be accumulated in the Land Bank.
According to the FGI website, the law launching a transparent lease of state-owned agricultural land through online auctions was adopted by the Verkhovna Rada on July 27, obliging the Fund to create a Land Bank.
“The main goal is to fight corruption on state-owned agricultural land. Every year, unscrupulous managers of state-owned agribusinesses leased state land to businesses under “gray” schemes. In their pockets got tens of millions of dollars of cash, and the state – losses,” – quoted the press service of the head of the FGI Rustem Umerov.
It recalled that about 700 thousand hectares of state farmland for years did not bring funds for the budget and citizens. FGI intends to change this by accumulating information about them in the Land Bank and will subsequently lease through open online auctions on the electronic platform Prozorro.
“The new investment product will allow each Ukrainian to start their own business, transparently and openly leasing a land plot through an online auction “, – emphasized in the FGI.
According to preliminary calculations, the expected economic effect from the introduction of transparent land lease will be up to 7 billion UAH per year.
The first auctions will be held in 2024.
The government’s main strategy remains to minimize the state’s share in the economy while maintaining state control in sectors that are strategic and important for Ukraine’s security, Prime Minister Denis Shmygal said at a meeting with First Deputy Prime Minister – Economy Minister Yulia Sviridenko and Head of the State Property Fund Rustem Umerov.
“There are many plans for this year. We continue small-scale privatization and resume large-scale privatization. We are transferring the majority of state enterprises to the management of the State Property Fund. We are developing a strategy for the management of enterprises confiscated from sub-sanctioned persons,” said Shmygal, as the press service of the government reports.
Also, according to Prime Minister, the State Property Fund has been instructed to introduce the OECD principles in the management of state-owned enterprises.
Last year privatization brought 1.7 billion UAH to the state budget. After the change of management, the economic effect of the IGF’s work amounted to more than 5bn hryvnias.
The State Property Fund of Ukraine (SPF) is ready to resume large-scale privatization in Ukraine despite the war, but first wants to analyze their condition, Rustem Umerov, newly appointed head of the Fund, said.
“So far, we want to preliminarily analyze the situation at the enterprises. After that, we plan to discuss with the government which of them we can now put up for sale,” he said in an interview with Forbes Ukraine, which was published on Tuesday.
Among the enterprises that could be put up for large-scale privatization, the head of the State Property Fund named the Odessa Portside Plant, the United Mining and Chemical Company (OGCC) and the Zaporozhye Titanium and Magnesium Combine (ZTMK), adding that he also intends to wait for the resumption of their work.
Answering a question about the revision of privatization in previous years, the new head of the State Property Fund said that he was not in favor of such an approach. “We must move on without looking back at the past,” he said.
Umerov added that an analysis of about 800 enterprises that the Fund recently received by government decision is also being carried out.
According to him, the presence among them located in the temporarily occupied territories is explained by the fact that one of the functions of the State Property Fund will be to assess the losses of Ukraine from the occupation, including the loss of these enterprises. “After the assessment, we will file lawsuits in international courts demanding compensation for the damage,” the head of the department said.
He also confirmed that the government is discussing the idea of transferring the arrested assets belonging to the Russians to the Fund. “After analyzing their financial situation, we will put them up for privatization. We will transfer the proceeds to the government, which will send them to the country’s defense,” Umerov explained the idea.
Among other initiatives, he named an inventory of all leased areas, discussion of the possibility of creating a land bank together with the Ministry of Agrarian Policy and Food, as well as work on the creation of a real estate agency – Real Estate Investment Trust.
Umerov also recalled plans to create a Sovereign Fund, to which enterprises of strategically important sectors for the state will be transferred: energy and critical transport infrastructure, as well as enterprises with a unique market position and licenses for the extraction of natural resources.
At a meeting on Tuesday, the Government of Ukraine decided to transfer more than 800 enterprises with assets worth UAH 45 billion to the State Property Fund, First Deputy Economy Minister Denis Kudin said.
“This is the largest transfer of enterprises in the term of this government. In fact, now only assets in the field of energy, infrastructure, defense industry, culture and standardization and metrology remain subordinate to the ministries,” he wrote on Facebook.
According to available information, in this list, in particular, “Artyomsol”, “Konyarstvo of Ukraine”, NSC “Olympic”, “Odessa Film Studio”, coal enterprises.
Kudin clarified that so far the Fund has not been transferred to enterprises in respect of which restructuring or transformation to another organizational form is underway: for example, from a state enterprise to a state institution or state organization, or companies in a state of liquidation, or perform service functions.
“The next step is for the State Property Fund. We expect that by mid-November the Fund will be able to actually start working as a management body for these and other enterprises, regarding which the decision to transfer was made earlier,” said the first deputy head of the Ministry of Economy, who was previously responsible for managing state assets in the Fund .
Kudin recalled that the goal of the reform is to reduce the size of the state in the economy and stimulate private entrepreneurial initiative. According to him, the Fund will make a decision on privatization of some enterprises, while others will be consolidated into asset management holdings and will bring dividends to the budget.
The State Property Fund (SPF) of Ukraine would like to become a single manager of all state property in the country, while it is currently distributed among 96 different state departments, Rustem Umerov, appointed this week as its head, said.
Speaking at the Rebuilding Ukraine forum organized by UkraineInvest on Thursday, he expressed the opinion that such centralization would improve the efficiency of state property management.
The new head of the SPF, Rustem Umerov, appointed by the Rada in early September, previously announced plans to create a Sovereign Fund, which would unite the main state enterprises, as well as the intention to make the SPF the sole manager of all state property in the country, while currently it is distributed between 96 different government departments.
