On 13 September 2016 the Cabinet of Ministers of Ukraine Resolution No. 271 of 31 August 2016 entered into effect. It introduced a new list of state entities subject to privatization. The most intense public outcry has provoked the inclusion of Turboatom, Elektrotyazhmash, Unified Mining and Chemical Company, and Zaporizhzhia Titanium and Magnesium Combine in the privatisation list. The list also comprises a number of other major companies, including Zaporizhzhia Aluminum Combine, Powder Metallurgy Plant, Artemsil, Ukrspyrt, Energostal Research and Technology Center of Metallurgy Industry, Kalush enterprise Oriana OJSC, and Electronprylad Scientific Production Complex specializing in the development and production of aviation equipment.
In addition, investors may be interested in the following newly added enterprises: Ukrainian Polymetals (mining industry); Fazotron (processing industry); Bilshovyk, Radiorele, Avtolyvmash, Kharkiv Electromechanical Plant, Hidromash (machine building and instrument engineering); Agrarian Fund, State Food and Grain Corporation (agro-industrial complex); Ukrzink (non-ferrous metal production); Odessa Airlines (transport industry); Ukrpapirprom; and Joint Ukrainian-Kazakh-Russian nuclear fuel production enterprise JV UKRTVS PrJSC. Over 130 enterprises were totally included in the list.
Nearly 100 enterprises were removed from the list: mainly companies operating in the agro-industrial sector, several mines, Ukrtorf State Concern, although its separate enterprises were added, Chernomorsky Shipbuilding Yard, Dniprodzerzhynsk Combined Heat and Power Plant, Smoly State Enterprise. The entities that remained on the list include most of the mines, sea ports, regional energy companies, Odessa Port Plant, Sumykhimprom, Azovmash, and Ukrainian Danube Shipping Company.
Hopefully, the government would take into account its experience of preparing and conducting privatization in 2016 so that at least several landmark enterprises are privatized in 2017. We will continue tracking the progress of preparation for and announcements on privatization tenders of specific entities that are particularly interesting for our clients.
We also recall that Ukraine has recently somewhat tightened the eligibility requirements for privatization bidders. Vasil Kisil & Partners has already advised its clients on such requirements in 2016 and dealt with bringing the clients’ corporate structures in line with the same.
Oleksandr Borodkin, partner
Stanislav Yushenko, associate