PRN: Ukraine 2012-2014 Privatization Program set to Raise USD 5 to 7.5 Billion
Ukraine 2012-2014 Privatization Program set to Raise USD 5 to 7.5 Billion
KYIV, Ukraine, February 22, 2012 /PRNewswire/ --
The State Privatization Program for 2012-2014 stipulates the decrease of the share of the state-owned sector in Ukrainian economy until it reaches 25-30 percent of the GDP. The Law of Ukraine on the respective Program has come into effect. Estimated income from the sale of national companies to domestic and foreign investors over three years is estimated at USD 5 to 7.5 billion.
Aircraft producing companies of global significance - Kharkov State Aircraft Manufacturing Company and aircraft manufacturing company Antonov ASTC - are among entities to be made available for investors in 2012. The world renowned machine producing company SJSHC Artem, founded 120 years ago, joins the list of enterprises Ukraine will be selling in 2012.
Ukrainian managing companies for thermal power stations Centrenergo and Donbasenergo will be made available for purchase by foreign investors; whereas previously, similar companies were privatized by domestic investors before foreign businesses had access to the bidding. In 2012 Ukraine will also sell liquor and wine producing plants, Kharkiv subway, and other smaller entities.
The State Privatization Program for 2012-2014 offers to lower the price of enterprises for sale to the level of demand price. Another instrument for more efficient privatization documented in the new law was splitting the companies' stock to encourage smaller investors to become shareholders. Ukraine will also decrease existing limitations for privatization of the state-owned companies that significantly curb privatization scale.
Moreover, 5 to 10 percent shares of strategically important companies and sites will be split in small portions and sold at the national stock market. This will allow Ukrainians to participate in privatization process as well as contribute to the development of Ukrainian stock market.
Following the Soviet Union collapse the process of privatization or selling off state commercial and other assets in Ukraine started in 1992. Admittedly, the privatization process faced a number of irregularities. Many companies were sold under non-transparent schemes for a price much lower than their market value. One of the first transparent privatizations took place in 2005 when India's Mittal Steel bought Ukraine's Kryvorizhstal, one of the largest steel plants in the world.
In 2011 Ukraine's largest state-owned telecommunications operator Ukrtelecom was privatized. 92.79 percent of the telecommunications giant was sold for approximately USD 1.3 billion.