Ukraine publishes updated 2018 privatization schedule

Ukraine’s State Property Fund (SPF) published on Dec.
18 its preliminary 2018 schedule of large asset privatization. The schedule
includes the remaining controlling stakes in nitrogen fertilizer producer Odesa
Portside Plant (February), power GenCo Centrenergo (CEEN UK, June) and five
power distribution companies (September-October).

It also includes a 68% stake in Zaporizhia Aluminum
Plant (February) nationalized in 2015 and a 46% stake in power DisCo
Cherkasyoblenergo (October, to be sold on the local stock exchange), as well as
almost 100% stakes in four small heat and power plants and Sumykhimprom
chemical plant. Most of the scheduled assets are subject to sale upon approval
of privatization conditions by the Cabinet, the SPF noted.

Alexander Paraschiy: This is
part of the SPF’s traditional annual scheduling that does not imply any
commitment from the Fund. The list of companies is just migrating from one scheduleto another. But at least it allows us to
see what assets the Fund is not going to offer. This time, we found no
controlling stake in the Turboatom (TATM UK) power turbine producer (its sale
was mentioned by the IMF in its latest memorandum). Also, it is strange to see
just a 46% stake in Cherkasyoblenergo, in which the state holds 71%. Also, the
scheduling of Centrenergo’s stake contradicts to what the Fund’s acting head
had said about the sale occuring next spring.

We traditionally are skeptical about the fulfillment of
the schedule in 2018. However, it’s very likely that the state will do its best
to sell Odesa Portside (after two failed tenders in 2016) and Zaporizhia
Aluminum (which it should have sold within 12 months after its nationalization
in June 2015).