Ukraine initiates privatization of 22 large companies

State Property Fund of Ukraine Head Vitaliy Trubarov
has signed orders to initiate the privatization of 22 companies from the fund’s
list of large assets, according to his Facebook post on June 11. The new
qualifications of large assets targeted for privatization (state stakes over
50% and book value of over UAH 250 mln) and their privatization procedure was
established by a new law adopted in January 2018.
It also called for the involvement of private financial advisers.

Trubarov did not clarify the 22 assets, but last week
indicated on Facebook that it would consist of the Cabinet’s list of 23 assets
approved by the Cabinet in May, excluding the Zaporizhia Titatium Plant (which
is going to be sold by a simplified procedure, according to the old law on
privatization). The Cabinet’s list of 23 includes power GenCo Centrenergo (CEEN
UK); engineering companies Turboatom (TATM UK), Elektrovazhmash, Azovmash and
Dnirpo Electic Locomotive Plant; five power distribution companies; four small
heat and power stations; chemical companies Odesa Portside Plant and
Sumykhimprom; and coal mine Krasnolymanska, among other assets.

In the privatization’s first stage that will conclude
this month, the fund is going to announce tenders for financial advisers that
will run the privatization process of each asset.

Alexander Paraschiy: It’s positive
that the long-running privatization saga is finally moving forward. However, it
will be late 2018, or another four-to-six months, by the time the privatization
auctions are finally organized. By then, the presidential election campaign
will be in full swing (for the March 2019 vote), which means it won’t be the
best time to sell anything in Ukraine. So despite this announcement, we
continue to believe that no large companies will be privatized this year.