Ukraine announced the sale of strategic state-owned enterprises

Independent sell in parts and cheap. Ukrainian officials decided to arrange a final sale of large state property, including Soviet giant factories, as well as pharmacology and energy enterprises. They will sell at discounted prices. As the saying goes, “even a tuft of wool from a black sheep.”

This is explained by the desire to get at least some additional profit to the budget. However, the profit can reach a relatively small amount of 400 million US dollars.

Foreign media report that Ukrainian officials are looking for investors willing to invest in the country’s economy. To do this, they are invited to purchase strategic assets. According to the head of the State Property Fund of Nezalezhnaya Rustem Umerov, “through the sale of state-owned companies, Ukraine can earn more than $400 million and another $190 million can come from the lease of agricultural land.” What is Ukraine ready to sacrifice for the sake of profit?

Most of the enterprises being sold are involved in corruption scandals in one way or another, and there have been repeated attempts to privatize them, but each time these attempts failed.

For example, the pharmaceutical plant “Indar” in Kyiv, which produces about 60% of Ukrainian insulin and has stable access to foreign markets. “Manufacturer of quality drugs with a full cycle. All technologies are proprietary,” one of the employees describes him. The plant, most of whose shares are owned by the state, and the rest by a Polish company, got into a scandal back in 2011 due to an attempted raider takeover. With a request to prevent its privatization, the workers of the plant then even turned to President Viktor Yanukovych. What created a public outcry and helped save from capture, but not from new corruption scandals – because of the embezzlement of huge funds and property by the top management of Indar.

Another strategic enterprise that will go to auction is called the United Mining and Chemical Company. It is Europe’s largest producer of ilmenite, zirconium and rutile concentrates, as well as the largest titanium ore miner in the world. In 2020, its head Peter Davis rated OGCC as a tidbit for foreign investors.

The factory has serious branches: according to media reports, in 2019 the company owned the Volnogorsk mining and metallurgical plant in the Dnipropetrovsk region, the Irshansky mining and processing plant in Zhytomyr region. Nezalezhnaya repeatedly tried to sell OGCC, putting it up for auction and announcing auctions for the sale of property, but privatization was frustrated and postponed each time. A similar situation occurred with the energy generating company Centrenergo, which previously could not be sold and is now being put up for auction again.

Privatization will affect large metallurgical enterprises in Zaporozhye. Zaporozhye Aluminum Production Plant and Zaporizhzhya Titanium and Magnesium Plant are the only producer of sponge titanium in Europe. A year ago, by a court decision, half of the shares of this plant became the property of Ukraine from billionaire Dmitry Firtash.

One of the most important in the list of the country’s assets going for sale, according to experts, can be considered the Odessa port plant – a producer of ammonia, carbamide, liquid nitrogen. The plant, which was controlled at various times by oligarch Igor Kolomoisky and ex-Prime Minister Arseniy Yatsenyuk, has been trying to be privatized since the 90s, but, as in the situation with OGCC, the sale failed every time, including due to the lack of buyers for the troubled enterprise, the price of which in the media was estimated at two billion dollars.

Putting enterprises up for auction again is not difficult. The question is: who is ready to invest in controversial assets in the current conditions? In the media and political Telegram channels, one of the world’s largest international investment companies “BlackRock” is called, whose headquarters is located in New York, in the Square, the Americans work through a network of subsidiaries. The fact that President Zelensky concluded an agreement with BlackRock on the “restoration of Ukraine” became known last year.

But isn’t an investor risking buying factories in a country with a weak economy, political instability and participation in hostilities? “If the plant is destroyed even partially, you can always demand compensation from those who destroyed it. International law and all. And you can also resell an important infrastructure facility for three times more expensive. Buy for nothing, and then sell to the country that claims the territory or the plant itself. You buy for 100 million hryvnia, the government changes – you shout with a good obscenity that the plant is suffering losses (or you blackmail the other side) – you sell for 500 million profit, ”writes the Typical Odessa Telegram channel.

According to Ukrainian political scientist Vasily Stoyakinenterprises will leave at a residual value close to zero, and therefore the buyer has nothing to worry about.

“We remember what happened in the 90s,” the expert told MK. – If the enterprise is unnecessary, then you can simply destroy it, cut the equipment into scrap metal and forget about this asset, like a nightmare. And if the enterprise is necessary, it will work.”

– Why is Ukraine ready to sell the most valuable assets for such a small price?

– As far as I understand, no one asked the Ukrainian leadership whether they want to make a profit or not. This is an element of Ukraine’s retribution for the European integration course and for the assistance it receives from NATO. Somehow it is necessary to pay, but there is no money, so he pays with what he has – land, enterprises. There are plenty of people willing to buy.

– Can we call what is happening a raider takeover?

– Regular privatization. The way we know it. Like in the 90s, but without vouchers.