President Zelenskyy signs law resuming Ukraine's large-scale privatization program
Volodymyr Zelenskyy (photo - OP press service)

On June 20, President Volodymyr Zelenskyy signed the law on the resumption of large-scale privatization, according to information on the parliament's website.

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Auctions for the sale of large state assets for the period of martial law were blocked by the relevant law in June 2022.

The Verkhovna Rada unblocked large-scale privatization on May 30. Draft Law No. 8250 allows privatization auctions for the sale of large state assets (large privatization), initiates the reorganization of the structure of the State Property Fund (SPFU) and determines the administrator of sanctioned property.

From now on, the head of the Fund gets the right to independently appoint and dismiss deputies. In addition, 12 regional branches-separate legal entities will become structural units of the SPFU. This will make it possible to create mechanisms for establishing competitive salaries and KPIs in all regions.

According to the decision of the High Anti-Corruption Court, the property subject to sanctions will be transferred to the State Property Fund. The Fund will be able to make management decisions (privatization, sale, lease or management), and the funds will be directed to the Fund for Elimination of the Consequences of Armed Aggression.

Also the law:

→ forbids persons subject to sanctions and citizens of aggressor states to hold management positions at state-owned enterprises and be members of supervisory boards;

→ cancels the procedure for coordination of directors of state-owned enterprises in the management of SPFU with local authorities;

→ removes restrictions on the term of lease of state property for the period of martial law.

In April, the head of the SPFU, Rustem Umyerov, stated that after the resumption of large-scale privatization, the budget of Ukraine may receive up to $400 million by the end of the year.

Odesa port plant, titanium producer UMCC, Zaporizhzhya Titanium-Magnesium Plant, insulin producer Indar and Centerenergo will be put up for auction. Auctions for the sale of these assets may take place in the third quarter of 2023.

Also, the Fund hopes to earn $190 million from the lease of state agricultural land through auctions on the Prozorro platform.

On April 26, 2023, the State Property Fund reported on the record sale of state assets in Q1 2023.

In May, SPFU held privatization auctions for UAH 703 million ($19 million).

In June, the State Property Fund decided to liquidate 1,278 state-owned enterprises out of 2,364 under its management.