Business news from Ukraine


The Cabinet of Ministers has raised the requirements for operators of privatization auctions, in particular, an operator must have at least six employees, a charter capital of at least UAH 1 million and its own call center for selection.
According to the draft regulation, the auction operator must also have an excellent business reputation with regard to the law on prevention and counteraction of legalization (laundering) of proceeds.
In addition, the requirement presupposes having at least a year of experience in the market for the sale of property in the form of auctions and cryptographic protection for a secure connection between the server and bidders.
As indicated in the draft regulation, the charge rate for participation in the privatization auction for an object worth more than UAH 64 million is set at 1% (previously it was set for objects worth over UAH 250 million), from UAH 4 million to UAH 64 million it is 2.5% (previously the charge rate of 2.4% was set for objects from UAH 1 million to UAH 4 million), and up to UAH 4 million it is 4% (previously the maximum charge was 3% for objects up to UAH 1 million).

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The delegation of the Ministry of Economic Development, Trade and Agriculture, during the visit of President of Ukraine Volodymyr Zelensky to Turkey, met with CEO of Aksoy Ventures Batu Aksoy.
Aksoy Ventures operates in the areas of electricity generation, fuel distribution and industrial construction, and is interested in the privatization of Ukrainian energy enterprises and the implementation of infrastructure facilities, the President’s Office said on its Facebook page.
“Ukraine is interested in the further growth of Turkish investments and the implementation of joint projects, including infrastructure projects under the terms of public-private partnership. In the near future, a list of priority investment projects for the state will be approved. It will, in particular, include public-private partnership projects. In addition, a new legislative platform is being formed in Ukraine – this is a bill on ‘investment nannies,’ which will significantly increase the attractiveness of Ukraine for investors,” said Minister of Economic Development, Trade and Agriculture Ihor Petrashko.
In turn, President Zelensky stressed that it is important not to postpone such meetings for later. “If there is a chance, we will also meet at the weekend, discuss the details in order to move faster to attract investment. Turkish business has proved its quality in the international arena,” the head of state said.

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KPMG Ukraine consulting firm has won the tender for the selection of an advisor for the preparation for privatization and sale of 100% of the charter capital of JSC First Kyiv Machine Building Plant (formerly Plant Bilshovyk, Kyiv), the press service of the State Property Fund of Ukraine (SPF) has told Interfax-Ukraine.
“The winner was KPMG Ukraine. There were three applications in total. KPMG won, as it scored the most points. The agreement with KPMG has already been signed. Documents are being prepared for the approval of the privatization adviser by the Cabinet of Ministers,” the press service told the agency.
As reported, at the end of September 2020, Head of the State Property Fund Dmytro Sennychenko said that Bilshovyk Plant was included in the list of objects for privatization formed by the fund for next year.
According to the information on the SPF’s website, the tender for the selection of a privatization adviser was announced in August this year. At the same time, the tender committee made a number of decisions for the successful privatization of this asset.
“Despite resistance, attempts to alienate property by raider methods and political pressure, we are moving privatization forward. At a transparent tender, an advisor will be selected who will qualitatively prepare the privatization object to attract an investor,” Sennychenko said.

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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.”



President of Ukraine Volodymyr Zelensky expects that Austrian companies will participate in tenders for the concession of Ukrainian seaports and the privatization of state-owned banks, and also invites them to introduce their experience, technologies and invest in large projects in Ukraine.
“I will be glad to welcome the participation of Austria in tenders for the concession of seaports and the privatization of state-owned banks in Ukraine,” he said at a joint briefing with Austrian President Alexander Van der Bellen in Vienna on Tuesday.
Zelensky also said that as part of his visit, he would invite Austrian companies to introduce experience, technologies and investments in large projects in Ukraine: the construction of new highways, tunnels, ski infrastructure, energy, waste processing and many other areas.
In addition, he invited the Austrians to visit the tourist places of attraction of Ukraine and join the process of restoring cultural heritage sites.
The president said that Austria is the sixth largest investor in the Ukrainian economy. “Austrian capital is represented in our banking and insurance sector, woodworking industry, sports goods,” he said.



The Cabinet of Ministers on Wednesday intends to consider a bill on the list of 188 companies prohibited from privatization, according to the agenda of the government meeting. According to the text of the bill, the government allows the privatization of up to 50% of the shares of Naftogaz, Ukrzaliznytsia and Ukrposhta, but proposes to retain the state’s 100% share of corporate rights in National Nuclear Generating Company Energoatom, PrJSC Ukrhydroenergo, NEC Ukrenergo , Skhidny Ore Mining and Processing Plant (VostGOK), and Ukrainian Sea Ports Authority (USPA).
It is also proposed to include the SE Market Operator and the SE Guaranteed Buyer, created by the Cabinet of Ministers in 2019 in order to ensure the operation of the new electricity market, in the list of objects completely prohibited for privatization.
In addition, it is proposed to include in the specified list the state-owned enterprise Document, Ukraina Printing Plant for the production of securities, Kyiv offset factory, and Pivdenne (Yuzhne) Design Bureau.

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