Parliament changes mechanism of liquidation of non-performing state-owned enterprises
Photo: SPFU

The Ukrainian legislature adopted a law on the specifics of terminating state-owned enterprises that exist only on paper and generate losses, reported the press service of the State Property Fund on Tuesday.

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According to the Fund, there are more than 1,200 such enterprises. To liquidate them all, more than UAH 30 million ($812,000) is needed.
The adopted law should ensure that the state not only does not spend money on the liquidation of these enterprises, but also can make money from it as a self-sustainability mechanism is introduced.

It provides for the involvement in the liquidation of qualified specialists (so-called "termination managers") who will search for the property of the state-owned enterprise and put it up for sale. For this, they will be able to receive from 3% to 5% of its value.

The rest of the money will be used to repay the debts of state-owned enterprises or finance the liquidation of state-owned enterprises without assets.

The State Property Fund expects that thanks to the new procedure, it will be possible to find and sell the assets of state-owned enterprises that are not working, with a total value of at least UAH 140 million ($3.8 million).

Liquidation of an enterprise by decision of the owner is possible if the sum of its assets exceeds its liabilities. Otherwise, the bankruptcy procedure is initiated.

On February 28, SPFU chief Rustem Umierov said that 95% of state-owned enterprises in Ukraine are going to be privatized, liquidated or declared bankrupt. The remaining 5% will remain under state management.