Starting this summer, the Ukrainian government plans to privatise about 20 state-owned companies, notably the "Ukraina" Hotel, a large shopping centre in midKyiv, and several industrial enterprises.
Points of attention
- The government of Ukraine plans to put about 20 state-owned companies up for sale, including the "Ukraine" hotel and large industrial enterprises in the centre of Kyiv.
- State asset sales are planned to raise funds to cover the state budget deficit and attract foreign investment to stabilise the economy.
- Privatisation can only be successful if there is high accountability and guarantees for the sale of assets, confirming experts' recommendations.
- The Ukrainian army faces the risk of seizing state-owned enterprises, so privatisation is strategically essential in wartime conditions.
- Privatisation of state-owned companies in Ukraine is not only an economic but also a political and strategic action aimed at supporting the economy and the army in an emergency.
What is known about the new attempt to privatise state property due to the state budget deficit
It is noted that the sale of state-owned enterprises is intended to raise funds to cover the state budget deficit of 5 billion dollars for military efforts.
In addition, it is planned to attract foreign investments to strengthen the economy.
The budget is in the red. We need to find other ways to get money in order to keep the macroeconomic situation stable, help the army and win this war with Russia, - explains Deputy Head of the Ministry of Economy Oleksiy Sobolev.
Journalists note that the government is just beginning the process of privatising state-owned enterprises but is already facing several serious problems.
In particular, ordinary Ukrainians believe the new privatisation may bring serious corruption risks.
According to Yevgeniy Baranov, director of the Kyiv-based investment company Dragon Capital, privatisation will be effective only if the government demonstrates itself as a responsible seller who can guarantee compensation to potential buyers.
This year, the government plans to sell state assets worth $100 million.
According to government officials and economic analysts, these assets are likely to be sold at a lower price, given the risks associated with the war.
The state is in desperate need of money. If we don't sell now and collect the money, soon there will be nothing to sell, because the property will either be destroyed or occupied, explains Mykhailo Lukashenko, partner of the Aequo law firm.
The authors note that there are currently about 3,100 state-owned enterprises, of which less than half continue to operate and only 15% remain profitable.
Last year, the five most unprofitable companies cost the state over $50 million.
The government's ultimate goal is to retain control over just 100 companies.
According to Vitaliy Koval, head of the State Property Fund (SPF), state-owned companies are corrupt and connected to other illegal activities.
Currently, the SPF is conducting a "sorting" to determine which enterprises should be privatised, liquidated or left under state control.
Koval emphasised that the Ukrainian army is currently facing a shortage of weapons to prevent the seizure of Ukrainian state-owned enterprises by the occupying army.
Which state-owned companies are planned to be put up for sale
The publication notes that the privatisation will affect the United Mining and Chemical Company, one of the world's largest producers of titanium.
Three auctions were cancelled even before the war. The Ukrainian government hopes the fourth auction, planned for autumn, will occur.
Hotel "Ukraine" has accumulated a debt of 1 million dollars. It wants to sell it to help finance the army and support the economy. The starting price of the object is 25 million dollars.
At the same time, Ukrainian government officials and economists admit that attracting investors will be demanding in wartime conditions.
