June 2023 – On 20 June 2023, President of Ukraine Volodymyr Zelenskyy signed Draft Law No. 8250 amending, among others, the Law of Ukraine "On the Privatisation of State and Municipal Property" (Law), signalling that Ukraine has once again set a course for large-scale privatisations. This time, however, the search for investors in large state-owned enterprises (SOEs) comes from the on-going war and mounting budget deficit.

The Law unblocks the sale of SOEs with book value of over UAH 250 million (approx. USD 6.76 million). It enables the State Property Fund of Ukraine (SPFU) to impose post-privatisation obligations on investors in large SOEs, including maintaining the SOE's core business and paying off wage and tax arrears. The changes do not apply to small-scale privatisations.

In addition, the Law optimises the structure of the SPFU and strengthens its role in the sale of sanctioned Russian assets. To remind, Ukraine has been seizing assets of Russian oligarchs supporting the war.

Next steps

In a recent interview, Rustem Umerov, the SPFU Chairman, named the assets that the SPFU considers to auction first. These include United Mining and Chemical Company (titanium ore mining and processing) and the Odesa Port Plant (nitrogen-based fertiliser production and trans-shipment).

According to Rustem Umerov, the SPFU also plans to auction off seized Russian assets, such as the Demurinsky Mining and Processing Plant, the Mykolaiv Alumina Plant, and the Ocean Plaza shopping mall in Kyiv.

The first privatisation auction is expected in the fourth quarter of 2023. Information on the SOEs is available on the SPFU's website.

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