Odesa Portside Plant privatization tender fails to occur

The State Property Fund of Ukraine announced on July 18 that a tender to sell a 99.6% stake in the Odesa Portside Plant (OPP), a producer of nitrogen fertilizers, will not be held on its scheduled date of July 26 due to a lack of interest from buyers. The potential bidders should have submitted their applications and tender deposits by July 18.

The Fund mentioned several reasons why investors abstained, including a high starting price (UAH 13.175 bln, or about USD 526 mln), the plant’s outstanding debt for natural gas supplied to Group DF (around USD 190 mln, as announced previously), and ongoing litigation with the winner of the previous tender, Nortima, which is controlled by Igor Kolomoisky. The conditions of sale should be reconsidered by authorities before the asset is placed for privatization again, the Fund said.

Roman Topolyuk: The sale of the Odesa Portside Plant would have been a landmark event that would have sent the message to investors globally that transparency is being introduced into Ukraine’s economy. We expect the preparation of another privatization tender might take up to six months or more, and the new starting price might be set at a lower level to induce potential bidders.