On 12 May 2015, the Cabinet of Ministers of Ukraine adopted Resolution No. 271 “On Conducting a Transparent and Competitive Privatization in 2015” (the “Resolution”), which approved the list of more than 300 State-owned entities (Supplements 1 and 2) subject to privatization in 2015.
A number of majority shareholdings and major economic enterprises are offered for the privatization, which is the largest in recent years, in particular:
- In the mining industry – State Concern “Ukrtorf,” a number of mines.
- In the energy sector – several power plants and equity stakes in major electricity manufacturers and suppliers.
- In the oil and gas industry – equity stakes in local gas suppliers.
- In the agricultural sector – state-owned enterprises with large amounts of arable land, State Enterprise “Horse-breeding of Ukraine” (approx. 40,000 hectares of land), State enterprises for the selection and breeding of livestock, a poultry farm, a greenhouse plant, a sugar mill, a sugar supply company and other entities.
- In the transport sector: diesel locomotive works, a locomotive plant, Airline Company “Horlytsya,” State Ship Company “Black Sea Steamship,” State Enterprise “Black Sea Yacht Club,” State Shipping Company “Ukrtanker” and Aviation Enterprise “Universal Avia.”
- In the construction industry - 100% of the shares in PJSC “Dniprometrobud” and equity stakes in other construction companies.
- In the chemical industry - majority shareholdings in public joint-stock companies “Sumykhimprom,” “Odessa Portside Plant” and JSC “Svema.”
- In the trading sector - 50% of the shares in Public Joint-Stock Company “Ukrnaftoproduct.”
- In the machine industry – equity stakes in machine-building, instrument-making and radio engineering plants.
- In the financial sector - 51% of the shares in the Specialized Joint Stock Company “Spetseksimstrah,” 99.99% of the shares in Public Joint-Stock Company “Ukrainian Bank for Reconstruction and Development.”
The list (Supplement 2) also includes the enterprises that have been previously included in the list of state-owned enterprises not subject to privatization. Specifically, this refers to 13 seaports, Public Joint-Stock Company “Ukrainian Danube Shipping Company,” Black Sea General Shipping Agency “Inflot,” State Enterprise “Main Breeding Centre of Ukraine,” a number of quarries, Building Corporation “Ukrbud,” etc.
State-owned entities listed in Supplement 2 may be privatized only after they have been excluded from the Law of Ukraine “On the List of Objects of State Property Not Subject to Privatization.”
Pursuant to the Resolution, the State Property Fund shall be obliged to:
- Ensure that the state-owned entities included in the lists are offered for sale through an open competitive auction, as a primary method of sale, without imposing any participation restrictions, and
- Submit the terms of privatization of the State-owned entities and proposals as to the terms of privatization of the state-owned entities to be sold together with the underlying land plots to the Cabinet of Ministers of Ukraine for approval.
The Ministry of Economic Development and Trade and the State Property Fund shall ensure the holding of special meetings with investors (“road-show”) regarding the entities subject to privatization. The competent State-owned property management authorities must conduct pre-privatization preparation of State-owned entities, if necessary.
This Resolution was published and took effect on 15 May 2015.
It should be noted that the Verkhovna Rada of Ukraine has registered a draft law designed to remove the proposed entities from the list of State-owned entities not subject to privatization. The Verkhovna Rada of Ukraine is expected to consider the draft law in the nearest future.