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20 August 2022

Ukraine wants to resume mass privatization in September 2022. Hundreds of companies shortlisted by the government are being readied for the sell-off. 

The Cabinet of Ministers has ordered to resume a large-scale privatization of state assets in September 2022. Suspended under the martial law in February this year, the effort is being restarted under a recent law. 

In July 2022 the Cabinet had approved 420 state-owned companies and other facilities for transfer into private hands. Control of these is now being handed over to the State Property Fund, Ukraine’s privatization agency. It will screen them to decide which should be put on the block and which liquidated. The first wave will likely involve assets in food-processing, such as distilleries and baking plants.

The government wants to privatize the companies quickly and with minimum red tape. One goal is to unload those weighed down by long-standing debts, which buyers would be required to pay off. Sales will be through a competitive bidding, with each asset aimed to be sold off within two months. 

The price will have to be paid in advance, with buyers required to post prior guarantee deposits. A starting price may be lowered in bidding, up to the half of its original amount. Where only one buyer is present, he will be able to acquire the property at his offered price (but not less than the starting price). If no takers answer the first call, a repeat auction may he held. A privatized company will keep all its original licenses and permits, which may be an additional incentive to buyers.

It is unclear whether the scheme will really take off. The ongoing war will remain a powerful deterrent. Even in areas now remote from the fighting, the overall economic disruption and the legal disabilities engendered by the martial law will likely work against it.

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