Ukraine is preparing to sell off large state-owned companies, including utilities and metal plants, at bargain prices to shore up its aid-dependent budget and end decades of post-communist corruption and mismanagement. which undermined the economy, reports Bloomberg.
If the measure is approved by parliament, Ukraine could gain more than $400 million, at best, by selling utilities and steel companies, as well as a fertilizer producer and an insulin producer. Another 190 million dollars can come from the lease of agricultural land, said Rustem Umerov, head of the State Property Fund of Ukraine (PSFMU), in an interview with Bloomberg.
How Ukraine is trying to convince foreign investors
He acknowledged that few people would want to invest in a country at war, but urged potential investors to think of Ukraine as a future investment that could turn out to be 20 times more profitable than meets the eye. at present.
“If we don’t sell them this year, next year the value of the companies will be only real estate, and the following year only the land on which they are located” will be able to be capitalized, Umerov admitted.
Among the companies that could be privatized are ammonia producer Odeski Priportovi Zavod, titanium producer United Mining and the Zaporozhye Titanium-Magnesium Plant, insulin producer Indar and power producer Centrenergo PJSC.
Thus, Ukraine is looking for investors who are brave enough to bet on the fact that it will succeed in repelling the Russian invasion, and for this it has a simple speech: a high risk can offer a high reward, writes Bloomberg.
“There are emerging markets and there is an emergency market, and as an emergency market, we are unique,” said Umerov.
The 41-year-old official is the eighth person to head the State Property Fund since the pro-Russian government of Viktor Yanukovych was overthrown in 2014. He has a difficult task. None of his predecessors managed to achieve the goal of selling large parts of the state economy. Two died by suicide, it seems, while a former president is being investigated for embezzlement charges, which he denies – notes Bloomberg.
The Russian invasion made the situation difficult. Almost every Ukrainian has lost a friend, a relative or a known person as a result of the violence. The war has driven more than a quarter of the country’s 40 million people from their homes and devastated entire sectors of the economy by destroying producers in occupied areas such as the eastern Donbas region and the port city of Mariupol.
How much the government expects to get from the sale of state-owned companies
While the government expects to get 6 billion hryvnias ($162 million) from the sale of state-owned companies this year, Umerov says he could potentially get four times that amount if the sale and leasing plans go through. they will be able to move on. This depends on parliament, which must first approve legislation to allow the privatization of large companies and the leasing of state-owned farmland. The deputies are divided into two camps – pro and con.
If the parliament fails to adopt the necessary laws, the alternative would be for the state to turn to joint ventures with other state companies to ease the burden on public finances, Umarov explained.
Another source of potential revenue is the seizure of Ukrainian companies with ties to Russia, he added. An example is Sense Bank, controlled by Russia, one of the largest lenders in Ukraine, which the government would like to nationalize.
Despite the unprecedented obstacles, Umerov said that Ukraine has another advantage: the solidarity of investors and allies who want to support the country in driving Russia from its territory.
