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Privatization Has Been Restored in Ukraine: The First Facility Has Been Sold at a Price Three Times Higher Than the Starting Price

The first privatization online auction since the beginning of the large-scale invasion of the russian federation took place on 19 September. The state budget will receive 70 million.

According to the results of the auction, the separate property of the Kobylovoloky location of alcohol storage of State-Owned Enterprise “Ukrspyrt” (Ternopil Oblast) was sold to a new owner at a price that was almost three times higher than the starting price. This happened in the framework of the renewed program of small privatization, which is taking place at the initiative of the Government. 

“One of the key tasks that we have to accomplish on the way to the implementation of the Plan for the Recovery and Building of a New Economy of the Country is to reduce the state’s participation in the economy. The state should not manage businesses – a private owner will do it much more efficiently. Privatization of enterprises gives a powerful impetus to the development of the economy. After all, for every Ukrainian hryvnia paid for one or another asset, we will receive an average of 4-6 Ukrainian hryvnias of investments, an increase in tax revenues to the budget, and new jobs. Today’s auction, among other things, is a powerful signal for potential investors. Ukraine offers unique opportunities. Therefore, as it was said during the presentation of the Advantage Ukraine platform, the biggest financial risk is not to invest in Ukraine already today,” said Yuliia Svyrydenko, First Vice Prime Minister – Minister of Economy of Ukraine.

During the online auction, six participants fought for the separate property of the Kobylovoloky operating location and alcohol storage. During the auction, the price increased from the starting price of UAH 25.2 million to UAH 70.253 million.

After signing the sales and purchase agreement, the winning bidder will receive property in the form of non-residential premises, transport, production equipment and an access railway track.

Let us remind that the Government has resumed the privatization of state-owned enterprises, which was suspended during the martial law period and unblocked with the adoption of bill No. 7451. In July, the Government approved a list of 420 facilities after the triage procedure – sorting into:

- those that will remain in state ownership,

- those that will be directed to the State Property Fund of Ukraine for privatization,

- those that will be liquidated. 

At the end of August, the Government changed the Procedure for Electronic Auctions for the Sale of Small Privatization Facilities and Determination of Additional Terms of Sale. Now it has been brought into line with the Law of Ukraine “On Privatization of State and Municipal Property”.

As part of “small privatization”, the state plans to find owners for at least 150 enterprises in 2022. The funds received will be directed primarily to the needs of the Armed Forces of Ukraine.

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