Ukraine: Parliament lifts ban on sale of large-scale privatization assets

In brief

On 30 March 2021 the Verkhovna Rada of Ukraine adopted the Law of Ukraine "On Amending Section V "Final and Transitional Provisions" of Law of Ukraine "On Privatization of State and Municipal Property" Regarding Privatization of Large-Scale Privatization Assets". The Law will enter into force after it is signed by the President of Ukraine and after its official promulgation.
 

Key takeaways

The Law lifts the statutory ban on the sale of large-scale privatization assets (those of book value in excess of UAH 250 million or USD 9 million) imposed in March 2020 upon the commencement of the COVID-19 pandemic.

The Law is aimed at incentivizing the completion of the preparation for privatization and it clears the statutory barrier for the government to announce the privatization auctions of a number of large-scale assets, including:

• United Mining and Chemical Company
• Electrovazhmash Plant
• Krasnolymanska Coal Company
• Odesa Portside Plant
• President Hotel
• First Kyiv Machine-Building Plant (Bilshovyk Plant)

According to the Law, until the end of the government-imposed pandemic restrictions, it will not be possible to privatize large-scale assets:

• through a Dutch auction or an auction with a preliminary examination of potential bids
• by way of a buyout to the single bidder

Background

The privatization ban for large-scale assets was first introduced on 30 March 2020. It prohibited both the sale and the preparation of such assets for privatization. On 2 September 2020, the ban for preparing the assets was lifted.