LAND HO! - Privatization Receipts To Cover Budget Deficit-2007.

On May 17, the Cabinet of Ministers approved the Budget Resolution for 2007. The resolution assumes GDP growth of 4.2% and inflation up to 10%. The budget deficit set at ~ USD 2 bln (2% of GDP) is expected to be covered by privatization revenues. Concorde Capital: The government has heavy-weight privatization targets at its disposal including Ukrtelecom (UTEL: BUY), 50%+1 Nikopol Ferro-Alloy (NFER: Suspended) to shore up the budget. However, the privatization of these companies looks like it will be a long, hard process.  With this in mind the government decided to increase the attractiveness and value of future privatizations by allowing state owned enterprises to be sold along with the land they are situated on.  Before this announcement, the land under newly privatized industries still belonged to the state.  Note that this resolution also covers land for oil and gas extraction, so keep your eye on the state owned Gazvydobuvannya (gas fields E&D) and other oil and gas producers, like Ukrnafta (UNAF: HOLD), which may benefit as well. In any case, this move will definitely have developers’ mouths watering and will more than double the value of most companies. The government plans to hold its first auction in three months and the most likely target is the Kyiv Motorcycle Factory and the 48 hectares it occupies in the heart of Kyiv.