Ukrainian PM predicts large privatization in 2016

Ukrainian  prime minister Arseniy Yatsenyuk expects that the privatization of large companies will start in Ukraine this year. To facilitate the process, parliament has to approve a law that “will allow investors to purchase state assets at a public and fair tender”, Yatsenyuk stated in his weekly TV report. Fertilizer producer Odessa Portside Plant and power GenCo Centrenergo (CEEN UK) will be among the assets that the state offers this year, the PM said.

Alexander Paraschiy: Last year, the government failed to start any privatization, having sold state assets for less than UAH 0.2 bln, instead of the plannned UAH 17 bln. The State Property Fund explained the failure as a result of the parliament’s inability to adopt a new law (drafted back in July 2015) aimed at making the privatization process more transparent. That draft was approved by the parliament in the first reading on Jan. 28, thus its adoption as a law, which will allow the government to start a large privatization program, has become more likely. Ukraine plans to raise UAH 17 bln from privatization in 2016, which is possible, assuming the largest enterprises (including chemical and electricity assets) will be sold.

Remarkably, the State Property Fund is considering to include a leading power turbine producer Turoabom (TATM UK) on the privatization list for this year. This company has never been considered for privatization before. By selling the 75.2% state stake in this company, Ukraine may get more than half of its planned privatization proceeds for 2016.