UKRAINE UNBLOCKS LARGE PRIVATIZATION

31/03/2021

 

On 30 March 2021, the Ukrainian Parliament adopted the draft law "On Amending Section V "Final and Transitional Provisions" of the Law of Ukraine "On Privatization of State and Municipal Property" regarding Privatization of Large Privatization Objects" (the "Law") in the second reading.

The Law is aimed at unblocking the privatization of large-scale objects and facilities, renewing auctions and pre-sale activities that were suspended due to the COVID-19 pandemic.

More specifically, the State Property Fund of Ukraine prioritises the privatization of the following facilities:

• First Kyiv Machine-Building Plant ("Bilshovyk"), one of the oldest industrial enterprises in Ukraine dealing with mechanical engineering and renting of premises. The plant's territory can be potentially used for the implementation of a major real estate project;
• Odesa Portside Plant, a major producer of ammonium nitrate, carbamide, liquid nitrogen, carbon dioxide, liquid oxygen, and sodium sulphate;
• United Mining and Chemical Company, a leading producer of titanium ore, zirconium, rutile and ilmenite concentrates in Ukraine and Europe; and
• President-Hotel, a four-star hotel in the central business district of Kyiv, ranked among the largest hotels in Ukraine's capital by a number of rooms.

According to the head of the State Property Fund of Ukraine, Mr Sennychenko, the adoption of the Law would allow attracting UAH 12 billion (ca. USD 450 million) to the state budget in course of privatization auctions. In 2020, despite the economic crisis caused by the COVID-19 pandemic, the Government was able to raise around UAH 2,5 billion from the privatization, though only UAH 400 million were initially anticipated.

The Law has to be signed by the President of Ukraine and will become effective on the day following its official publication.

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