Ukraine prepares privatization list for 2016

Ukraine’s State Property Fund (SPF) is planning to put up for sale state stakes in 88 enterprises in 2016, according to the list published in its official newspaper on Jan. 13. The list includes 34 controlling stakes, including over 99% shares in chemical companies Odesa Portside and Sumy-Khimpom, 78.3% in power GenCo Centrenergo (CEEN UK), 50%-70% stakes in four power distribution companies, and 99%+ stakes in four heat & power plants. It also contains 25%-50% stakes in 31 companies, including 25% in five power distribution and generation companies controlled by DTEK (DTEKUA).

Alexander Paraschiy: Based on the 2016 state budget, privatization should bring UAH 17 bln to Ukraine this year. However, Ukraine has a long tradition of failing to meet its privatization goals, which was the case in 16 of the last 19 years. Clearly, no one is banking on much proceeds this year as well. In 11M15, the SPF received  just UAH 0.14 bln from privatization, compared to its full-year plan of UAH 17 bln.

The list for 2016 looks preliminary, and it contains much fewer companies than last year’s list. In particular, there are no coal mines and seaport stevedores in the new list. As the SPF head stressed earlier, privatization can only start if the Ukrainian parliament adopts changes to the privatization legislation to make this process more efficient. Ukraine’s parliament found no time to consider these bills (which have been ready since September) and it hasn’t indicated whether it will in the near future. Therefore, 2016 has all the chances to be as fruitless, in terms of privatization, as the previous year.