Page 32 - UKRRptNov21

6.1.4 Budget dynamics - privatization
The State Property Fund has held more than 1,500 auctions since the beginning of 2021. The State Property Fund of Ukraine (SPFU) earned more than UAH 2.2 billion ($83 mln) from the auctions "Privatization is, first of all, the transformation of unproductive assets into productive ones”, Sennichenko said.
Privatization of salt-mining enterprise in the Kherson region. During the online auction, the bidding's value increased 7.3 times from the starting price of UAH 6.13 mln ($233,000). The auction had 9 registered participants and the asset included land and a property area of 1,541.28 square meters.
Trostyanets distillery privatized for ₴44mn ($1.67mn), announced the State Property Fund (SPFU). The auction had a starting price of ₴44,012,959. The asset included 49 hectares of land with 67 buildings, including industrial stock for production and warehouses, with a total area of 21,102.4 sqm.
Metinvest purchases of Dniprovskyy Steel assets face legal challenges. Dniprovskyy Steel’s sales of its assets to Metinvest’s subsidiary Dniprovskyy Coke are being legally challenged, Interfax-Ukraine reported on October 25. Namely, Indumet S.A. (Luxembourg) sued Dniprovskyy Steel, demanding that the results of the sale of its assets at an auction in July, conducted as a part of its bankruptcy and financial recovery process, be declared void. The initial hearing on the case will take place on November 9 in Dnipropetrovsk Region Economic Court, according to the court’s October 19 decision. Recall, in July, Dniprovskyy Coke acquired for $339mn the PP&E and other assets from Dniprovskyy Steel. The other assets included $457mn of accounts receivable. Indumet also filed a criminal complaint claiming that Dniprovskyy Steel’s sale of three blast furnaces and a power transformer to Dniprovskyy Coke in May 2018 was fraudulent, according to an October 13 decision by an investigative judge of Zavodskyy District Court in Kamianske, Dnipropetrovsk Region. Indumet claimed that the amount that Dniprovskyy Coke paid for these assets, $12.8mn (excluding VAT), was too small, which was embezzlement of property. Indumet has claims of at least $255mn against Dniprovskyy Steel and some other Ukrainian companies, and alleged that it was hurt as a result of this deal. Indumet is affiliated with the Russian state development corporation VEB.RF, according to Interfax-Ukraine. VEB.RF reportedly was a stakeholder in Industrial Union of Donbas (IUD), which owns Dniprovskyy Steel, the entity that has sold its key metallurgical assets to Dniprovskyy Coke.
Ukrainian tycoon and former politician Vasyl Khmelnytsky confirmed he had bought the highly-coveted Bilshovyk machinery plant alongside his partner Andriy Ivanov and real estate developer Oleksiy Baranov for a trifling $53mn at an auction on October 27. It’s the largest state asset sold for the last 16 years, in the framework of President Volodymyr Zelenskiy’s Big Privatization program aimed at selling the state’s properties to fill the government’s coffers. Experts believe the market price, in a fair sale, could have easily tripled the starting price, reaching up to $150mn, the Kyiv Post reported on October 21. It took only six minutes for the company to win the
32 UKRAINE Country Report November 2021 www.intellinews.com