Privatization Imminent for Major State Property Assets

The State Property Fund of Ukraine is planning several privatization auctions to sell the country’s major state factories, enterprises, and hotels.

The head of Ukraine’s institution responsible for selling key state property, Vitalii Koval, intends to use the “Prozorro.Prodazhi” auction platform, according to an interview with Ukrainian media outlet LIGA. The aim of doing so is to ensure openness and transparency in the process, as well as to expand the circle of potential investors.

Originally created to sell assets of Ukrainian banks falling into bankruptcy, the platform is now used to lease state land and sell small and medium-sized state premises. The privatization of such major assets seeks to bolster state internal reserves and support the Armed Forces of Ukraine (AFU) as the war continues.

Koval wants to motivate the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and international insurance companies to provide war insurance for future privatized objects since many of them are close to the frontline.

Below is a list of what Ukraine is about to sell, with auction dates where known:

Sept. 18: Auction on Ukraina Hotel, located in Independence Square. Starting bid: Hr. 1.47 billion ($36 million).

Oct. 9: Auction on UMCC Titanium, Ukraine’s titanium producer operating the Vilnohirsk Mining and Metallurgical Plant and Irshansk Mining and Processing Plant. Capacity: 500,000 megatons of titanium annually. Starting bid: Hr. 3.9 billion ($94 million).

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According to Koval, the company is working and has earned a net profit, with US and Australian investors interested in the asset. Russian and Belarusian citizens are prohibited from taking part in the auctions.

Autumn 2024 (date TBC): The state property fund is going to sell Aeroc company, a concrete and building materials factory previously owned by Russian entrepreneur Andrey Molchanov. Koval reported the company’s value at an estimated Hr. 965 million ($23 million)

Ukraine imposed sanctions on Molchanov and this led to being able to obtain the Aeroc facilities as Ukraine’s property following a decision by Ukraine’s anti-corruption court.

No date yet reported: The state property fund is also assessing Demurinsky Mining and Processing Plant and the majority share of Ocean Plaza shopping mall in Kyiv to make it ready for privatization.

Additionally, the Zaporizhzhia Aluminum Production Plant and Mykolaiv Alumina Factory are on the State’s property fund balance but are not yet ready to be privatized.