On 13 June 2016, the State Property Fund of Ukraine
(SPFU) announced the auction for the sale
of 99.567% of shares owned by the state in PJSC "Odessa Port
Plant" (OPP). The initial price of
the shares is almost USD 530 million* (13.175 billion
UAH), which constitutes over 75% of all privatization proceeds that
Ukraine expects to receive in 2016.
The sale of OPP signals the start of "big
privatisation" announced by the Cabinet of Ministers of
Ukraine back in May 2015. The SPFU emphasizes that privatisation of
OPP will be transparent and will be carried out in accordance with
best practices in order to renew the confidence of foreign
investors in Ukraine. It should also become a model for successful
privatisation of other assets.
Auction for the sale of OPP shares is scheduled for 26 July
2016. The guarantee deposit is almost USD 26.4 million* (658.7
million UAH). The price increment is USD 8 million* (200 million
UAH). A potential investor should notify its intention to purchase
OPP shares on or before 26 June 2016, and the bid should be filed
with the SPFU on or before 18 July 2016.
Announcement of privatisation of OPP was preceded by a lengthy
preparation, which included amendments to the Ukrainian
privatisation laws. Hence, the Law of Ukraine No. 1005-VII of 16
February 2016 cancelled mandatory sale of 5-10% of shares in
strategic objects on stock exchanges and allowed the parties to
refer any disputes arising out of sale and purchase agreements
concluded in the course of privatisation to international
commercial arbitration. The law also improved the procedure for
engagement of advisors in preparation for privatisation and sale of
strategic assets. This allowed SPFU to engage UBS as financial
advisor as well as reputable legal and accounting advisors to
assist with the process of pre-sale preparation of OPP. Apart from
this, the SPFU decreased the guarantee deposit for participation in
the auction from 20% to 5% of the initial purchase price.
OPP is a leading Ukrainian nitrogen fertilizer producer and
transshipment company benefiting from its advantageous location on
the Black Sea coastline. The Plant accounts for 23% of carbamide
and 18% of ammonia production capacity in Ukraine, making it the
largest producer of carbamide in the country and the second largest
producer of ammonia. Exports account for c. 90% of carbamide
output and c. 99% of ammonia output, with products shipped to
over 30 countries worldwide, including EU countries and the
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