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.
Head of the State Property Fund (SPF) Dmytro Sennychenko has announced the Fund’s readiness to begin the process of privatization of objects of the State Enterprise Ukrspyrt, the department has already received 12 proposals for privatization.
According to the Fund’s press release posted on Tuesday, the privatization of the alcohol industry at the first stage provides for the placement of Ukrspyrt facilities for transparent auctions. The total number of objects ready for the privatization process is 41.
The Chairman of the State Property Fund also drew attention to the fact that the key condition for the successful privatization of assets in the alcohol industry is the prompt approval by the government of the Program for the Reform and Development of the Alcohol Industry, which will provide for the procedure and conditions for the sale.
“Potential investors in the alcohol production industry are not only food alcohol producers, but also pharmaceutical companies, automotive fuel producers and agricultural companies that are interested in processing their own products,” the SPF’s press service quoted Sennychenko as saying.
According to him, until recently Ukraine, together with Belarus, were the only countries in the world with a state monopoly on alcohol production.
“This has led to the fact that over the past decade, the production of legal potable alcohol in Ukraine has decreased four times, and the share of its shadow turnover has increased from 10% of total consumption in 2007 to 55% in 2019,” said the head of the SPF.
Privatization of large-sized enterprises in Ukraine could bring $1 billion to the national budget in the coming years, Ukrainian Prime Minister Denys Shmyhal has said.
“We also have high expectations from large-scale privatization, which should bring about $1 billion to the budget in the coming years,” the prime minister said during a government meeting on Wednesday.
The big privatization will be launched as soon as the coronavirus crisis is over, and the Dnipro Hotel will become its pilot project, President of Ukraine Volodymyr Zelensky has said.
“As to medium-sized and big privatization, everything is ready. It will be launched after COVID-19. The first target – the Dnipro Hotel – is ready. As we promised, we started with public administration agency,” he said at a press conference in Kyiv on Wednesday.
The president also said the rest of hotels on balance of the public administration agency will be handed over to the State Property Fund.
The privatization targets have been “cleared off” legal cases, Zelensky said.
Private joint-stock company United Mining-Chemical Company, which the State Property Fund (SPF) of Ukraine jointly with the advisor BDO is preparing for privatization, is of the biggest interest among potential buyers, Head of the SPF Dmytro Sennychenko has said. “United Mining-Chemical Company is still the flagship of large-scale privatization: according to the advisor BDO, which is completing the preparation of marketing materials, 16-18 companies have already announced their intentions to take part in the competition,” he said in an interview with Interfax-Ukraine.
“Among them are two Ukrainian holdings, and the rest are well-known international companies: Japanese, Australian and others that will compete, having received information about the company, about reserves, about deposits,” Sennychenko said.
He explained this significant interest in the competition by the fact that titanium production has a value chain from final consumers to semi-finished products and titanium sponge manufacturers and ore mining companies.
“We will look at the profiles of these customers together with the relevant services and analyze them from the point of view of strategic security… We will carefully look at what holdings are there, what is the ownership structure,” the head of the SPF said. He called the publication about the alleged preparation of this facility for sale to buyers from Russia stove-piping.
Sennychenko recalled that the advisor and international professional companies, together with the SPF and the competition commission, will prepare draft conditions for potential buyers. However, the Cabinet of Ministers will finally approve these conditions.
Kyiv’s business court has annulled a ban the State Property Fund of Ukraine (SPF) from preparing for the privatization of PJSC Centrenergo, passing a ruling under a petition of the SPF on February 6, 2020.
The fund said on its website that at the end of January, the fund started the procedure of selecting investment advisors for the privatization of Centrenergo and is attracting an audit company with an impeccable reputation to conduct audit of the enterprise for 2019.
“In February, procedures to prepare a number of other large facilities for the privatization will be launched,” the SPF said.
As reported, Vitaliy Kropachev’s Ukrdoninvest LLC (Kyiv) repeatedly secured a lawsuit against the State Property Fund in the case of the privatization of PJSC Centrenergo by banning the fund from taking any actions to implement it.
Prosecutor’s office in Kyiv opened criminal proceedings on making the deliberately illegal decision to ban the privatization of PJSC Centrenergo by a judge of the business court of Kyiv.
