Privatization auction for Odesa Port Plant fails as starting price proves too high
Photo: OPP

The auction for the privatization of Odesa Port Plant JSC did not take place due to the absence of registered participants, according to the Prozorro.Sale platform.

The Ministry of Economy said that the privatization terms turned out to be too burdensome for potential investors. In addition to the starting price of UAH 4.49 billion, the buyer would have been required to assume significant financial obligations.

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These included investing at least UAH 500 million in modernizing the plant, clearing more than UAH 366.8 million in wage and budget arrears within a year, gradually repaying overdue liabilities, and maintaining the company’s core operations.

“The lack of demand under the initial conditions may indicate that the starting price exceeds the market value when combined with the other financial obligations the buyer must undertake,” the ministry said.

The Ministry of Economy has begun consultations with stakeholders to “create a more balanced and attractive package of conditions.” It also endorsed a draft law that would allow large privatization assets to be offered with a mechanism for gradually lowering the starting price.

“This will help avoid situations where an asset receives no bids due to an inflated initial price,” the ministry explained.

  • Odesa Port Plant is one of Ukraine’s largest chemical enterprises, specializing in the production of ammonia and urea. Since the beginning of the full-scale invasion, its main production units have been idle, and the plant has been performing only limited logistics functions.
  • In 2009, Nortima, a company affiliated with Privat Group, won a tender to acquire a 99.567% stake in the Odesa plant with a bid of UAH 5 billion ($625 million). Other bidders included Azot-Service, affiliated with Russia’s Sibur, and Frunze-Flora, controlled by Konstantin Grigorishin. The results were later annulled on suspicion of collusion.
  • In 2016, three attempts to privatize the plant also failed due to a $250 million debt to Ostchem.