Business news from Ukraine


In the framework of the “big privatization” program, Ukrainian strategic enterprises will be sold cheaply not to strategic foreign investors but to people close to the authorities, Ukrainian parliamentarian, leader of the Osnova party, Serhiy Taruta has said, commenting on the Cabinet’s approval of a list of 26 large state enterprises for privatization in 2018. “I oppose such privatization, within the framework of which strategic profit-making enterprises like Turboatom are sold, which received a profit of UAH 711 million in 2017. The question arises – why do we sell such enterprises? I believe that this “big privatization” is a big robbery of the country,” Taruta said on the air of the NewsOne TV channel.
The parliamentarian recalled about privatization of the Odesa Port-Side Plant, which in 2016 was twice exhibited for the competition: in July at a starting price of UAH 13.2 billion (about $530 million), and then in December at a reduced price of UAH 5.16 billion (about $200 million), but in both cases the competition did not take place. And the current starting price of the Odesa Port-Side Plant at UAH 1.4 billion ($54 million) proved to be 10 times lower than a three-year-long price.
“Ukrainian strategic assets are sold very cheaply, but due to high risks, strategic foreign investors will not come. Therefore, privatized enterprises will be given to people close to the authorities. Therefore, current privatization is a continuation of the robbery,” Taruta added.
According to the MP, Polish experience can be used for effective privatization.
“We can use the experience of Poland, where first a specialized agency was created, modern management standards were introduced, then foreign experts were involved as advisers, under the guidance of which the state enterprises were first profitable and investment attractive and only then privatized at high cost,” Taruta said.
The parliamentarian also stressed the importance of investor compliance with investment obligations.
“The cost of privatization should not be the main criterion. It is more important for the buyer to keep its obligations to modernize production, preserve the profile of the enterprise and jobs, increase wages and improve the environmental component. There were already many cases in Ukraine when the privatized enterprise was bankrupt then. We need to change the philosophy of privatization, namely, to sell the asset with high investment obligations. In the event of default, reprivatization must take place,” he said.
As reported, on May 10, the Ukrainian government approved a list of large enterprises for privatization in 2018. It includes 26 enterprises: five regional electricity supply companies, Centrenergo, Odesa Port-Side Plant, Turboatom, Zaporizhia Titanium and Magnesium Combine, United Mining-Chemical Company and Sumykhimprom and others.



The Industrial Development Agency of Poland (IDA) has reported that the first, most important stage of negotiations on the acquisition of the stake belonged to Ukrainian businessman Serhiy Taruta in Gdańsk Shipyard S.A. and GSG Towers Sp. z o.o has been completed.
“On March 28, the sides signed an agreement (the so-called term sheet) regarding the main terms of the final deal… The sides approved the key conditions of the deal and the schedule for the transfer of control over companies to the IDA,” the IDA said on its website.
The agency said that the offer was preceded by several weeks of intensive talks launched in January 2018 after the IDA filed an application to purchase assets from the Ukrainian owner.
Earlier Taruta told Hromadske TV that his daughter held the negotiations, as he is not involved in business now.
According to the report, of the IDA, its offer is of the market nature. The finalization of the deal still requires the observation of some conditions approved by the two sides, including the approval from the Poland’s antimonopoly agency.
The IDA plans to stabilize the situation at the two enterprises and continue building ships and towers for wind farms.
The IDA now owns 18.59% in Gdańsk Shipyard and 50% in GSG Towers, while the rest of the shares belong to the Ukrainian investor.

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