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6.1.4 Budget dynamics - privatisation
The government has announced the privatization of five large companies but wants to maintain control of strategic assets. The State Property Fund (SPFU) has already sold assets worth ₴4.5B within the framework of small privatization this year. Next year, it is planned to privatize five large objects, Prime Minister Denys Shmyhal said at the Kyiv International Economic Forum. He clarified that the government has transferred 2,200 state-owned enterprises to the SPFU during the war. The government plans to leave up to 200 critically important enterprises under state ownership, corporatizing them and appointing supervisory boards. The head of SPFU, Oleksandr Fedoryshyn, noted that strategic assets should remain in state ownership. These companies should be transferred to the management of the Ukraine Sovereign Fund. These companies include Ukrainian Railways (UZ), energy enterprises related to national security (Ukrenergo, Energoatom), and distribution companies. At the first stage of the SPFU's development, there should be a group of 30 such companies whose value reaches $45B. At the same time, with competent management, their value may increase to $200B in three years.
The SPFU will sell 41 assets in October for a total starting price of ₴290mn ($8mn). The most interesting lots, according to the State Property Fund of Ukraine (SPFU), include:
● Volyntorf is a peat mining enterprise. Volyntorf consists of the independent Manevytskyi Peat Factory division. The starting price is ₴190M. The auction is scheduled for October 6.
● Kryvbasproekt State Institute for Designing Enterprises of the Mining and Ore Industry is a working enterprise that employs 206 people. The starting price is ₴28.9M, the auction is scheduled for October 12.
● Niginsky quarry — this enterprise is in the Khmelnytskyi region, the main activity of which is the extraction of building and decorative stone, limestone, gypsum, chalk, and clay-slate. The starting price is ₴26M, the auction is scheduled for October 5.
● Ukrainian House of Porcelain and Earthenware Industry, in the Kyiv region, has not been active since 2011. The starting price is ₴21M, the auction is scheduled for October 4.
● A separate property serving as a place of activity and alcohol storage for Ukrspirt. The enterprise, founded in 1881, produces ethyl-rectified alcohol. The starting price is ₴4.9M, the auction is scheduled for October 6.
The United Mining and Chemical Company and the Demurinsky Mining and Processing Plant will be offered as one lot within the framework of large-scale privatization. The State Property Fund of Ukraine (SPFU) is preparingboth state assets for privatization. Simultaneous privatization will strengthen the position of these assets on the market and obtain a guarantee for the development of enterprises in the titanium industry for the long term, the SPFU believes. "If different investors buy out UMCC and Demurinsky GZK, they may not find a common language. If we put up a single lot, we may get a serious strategic investor and a guarantee of the development of titanium industry enterprises for the long term," said the head of the SPFU, Oleksandr Fedoryshyn. UMCC is one of the world's largest producers of titanium raw materials, with 4% of the global market, and is among the top ten in the world in terms of production volumes. It is a leader in producing ilmenite, rutile, and
62 UKRAINE Country Report November 2023 www.intellinews.com