Privatization Renewal Year: The State Property Fund, thanks to small-scale privatization, allocated approximately 4 billion hryvnias to support the Armed Forces
Last year, on September 19, 2022, the first auction of state property privatization during wartime took place. Despite russia's full-scale invasion, Ukrainian entrepreneurs demonstrated significant competition for the ownership rights of the Kobylivodsky distillery. Six participants took part in the auction, and the asset's value increased by 2.8 times, from the initial 25.2 million hryvnias to the winning bid of 70.2 million hryvnias.
In total, during auctions for small-scale privatization, 430 investors became new owners of assets in the past year, and the average increase in the value of objects during transparent online auctions occurred threefold. Additionally, after the acquisition, the new owners paid over 950 million hryvnias of outstanding debts of enterprises to employees and the budget. Furthermore, 680 million hryvnias of value-added tax (VAT) were also paid.
"This year, the Fund managed to raise funds for approximately 30 HIMARS or over 1700 Stinger MANPADS, which is a significant achievement for our Armed Forces. It's essential to understand that in wartime, non-operational assets lose their value and accumulate debts. Privatization of such enterprises is the only way to find an investor willing to invest, pay taxes, and create new jobs. Privatization is currently invigorating the economy, as evidenced by the sale of two buildings of the "Hermitage" hotel in the city center. 39 participants took part in the auction, and the final value increased almost 15 times, reaching 311 million hryvnias. This is the most expensive object during the privatization renewal period," emphasized the Acting Chairman of the State Property Fund, Oleksandr Fedoryshyn.
An important achievement of the Fund's team is the auctions for the privatization of a peat enterprise and a seaport, which took place for the first time in Ukraine's history. "Rivnetorf" was privatized for 205 million hryvnias, and the "Ust-Dunaisk" seaport was sold for 201 million hryvnias. Additionally, ⅔ of the assets in the alcohol industry found new private investors as part of the market deregulation of alcohol production in Ukraine.
In the coming year, SPFU has equally ambitious plans – the sale of confiscated assets of russian oligarchs and collaborators. Today, the entire team is working on improving the mechanisms for the sale of sanctioned property, and a register has already been launched, containing a list of all seized assets sanlist.spfu.gov.ua
Furthermore, considering the results of small-scale privatization, we are actively working on the revival of large-scale privatization. Today, the operation of large enterprises is the cornerstone of Ukraine's economic recovery after the war. Currently, the State Property Fund's team is conducting a comprehensive analysis of all objects. We are collaborating with law enforcement agencies, advisors, and experts from relevant ministries to conduct audits and inspections, aiming to rid enterprises of unscrupulous management and prepare assets for sale.