Ukraine is selling its state-owned enterprises, at low prices, to get money for the budget – Bloomberg

Ukraine is preparing to sell off large state-owned enterprises, utilities and metal plants at bargain prices to shore up its aid-dependent budget and end decades of communist corruption and mismanagement that have undermined the economy.

Rustem UmerovPhoto: Sergey Colodilin/AP/Profimedia

If the measure is approved by the parliament, Ukraine could make more than $400 million in profits. Another $190 million could come from leasing agricultural land, Rustem Umerov, head of the State Property Fund of Ukraine (PSFMU), told Bloomberg in an interview.

How Ukraine is trying to convince foreign investors

He acknowledged that few would want to invest in a country at war, but urged investors to think of Ukraine as a future investment.

“If we don’t sell them this year, next year the value of the companies will be only real estate, and next year we will be able to capitalize only the land on which they are located,” Umerov admitted.

Among the companies that could be privatized are ammonia producer Odeski Pribordovy Zavod, titanium producer United Mining and Zaporizhia Titanium-Magnesium Plant, insulin producer Indar and power producer Centernergo PJSC.

Therefore, looking for investors brave enough to bet on the fact that Ukraine will succeed in repelling the Russian invasion, this is a simple saying: high risk can pay high reward, Bloomberg writes.

“There are emerging markets and there is an emergency market, and we are unique as an emergency market,” Umerov said.

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 were able to achieve the goal of selling off large parts of the state’s economy. Two people killed themselves, it seems, and a former president is being investigated for fraud charges, which he denies – Bloomberg notes.

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The Russian invasion made the situation difficult. Almost every Ukrainian has lost a friend, relative or acquaintance as a result of the violence. The war has driven 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 Donbass region and the port city of Mariupol.

How much does the government expect to get from the sale of government enterprises?

While the government expects to get 6 billion hryvnias ($162 million) from the sale of state-owned enterprises this year, Umerov says it could get four times that amount if sales and leasing plans go through. . It depends on parliament, which must first approve legislation allowing large companies to privatize and lease state-owned farmland. The representatives are divided into two camps – pro and con.

If parliament fails to adopt the necessary laws, the alternative would be for the state to turn to joint efforts with other state institutions to reduce the burden on public finances, Umarov explained.

Another source of potential revenue is the capture of Ukrainian companies with ties to Russia. The government wants to nationalize the Russian-controlled Sens Bank, one of Ukraine’s biggest lenders.

Despite the unprecedented sanctions, Umerov said Ukraine has another advantage: the unity of investors and allies who want to support the country in ousting Russia from its territory.

Follow the latest developments on the 421st day of the war in Ukraine in LIVETEXT on HOTNEWS.RO.

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