Ukraine: Government initiates privatisation campaign for 2014

CMS Cameron McKenna, 
Kyiv, Ukraine, Wednesday, August 6, 2014

On 17 July 2014, the Cabinet of Ministers of Ukraine (CMU,the Ukrainian Government) adopted the list of state companies and otherstate-owned assets which are subject to privatisation in 2014 (the “List”). Therelevant Resolution of the CMU has been published.

That List contains over 160 lots representing various sectorsof the Ukrainian economy, including transport, heavy industry, energy,agriculture, chemistry, etc.

Among others, the following significant assets are to beprivatised:

·               PJSC“Odessa Port Plant” (99,567% of the shares), one of the largest chemicalproducers in Ukraine;

·               PJSC“Azovmash” (50% of the shares), one of the largest heavy machinerymanufacturers in Ukraine;

·               PJSC“Centerenergo” (78,29% of the shares), one of the major power generatingcompanies (7,600 MW of installed capacity, 14% of the total installed capacityin Ukraine, 8% of the total electricity production in Ukraine);

Regional power distribution companies:

·               PJSC“Zaporizhzhiaoblenergo” (60,248% of the shares);

·               PJSC“Mykolaivoblenergo” (70% of the shares);

·               PJSC“Kharkivoblenergo” (65,001% of the shares);

·               Blockingminority stakes (25% to 50% of the shares) in other energy companies(oblenergo) located in Dnipropetrivsk, Vinnytsia, Donnetsk, Kyiv, Sumy andother cities of Ukraine;

Combined heat and power generation companies:

·               PJSC“Khersonska CHP” (99,833% of the shares);

·               PJSC“Odesska CHP” (99,99% of the shares);

·               PJSC“Nikolaivska CHP” (100% of the shares); and

·               “DniprodzerzhynskaCHP” (99,928% of the shares);

Blocking stakes in over 30 gas supply and distributioncompanies (oblgas).

The CMU expects that the privatization campaign in 2014 willbe the biggest for the last 20 years in Ukraine. The CMU intends to launch ahuge advertising campaign to attract potential investors.

Source:Resolution of the Cabinet of Ministers of Ukraine No. 667-р dated 17July 2014 “On Approval of the List of Objects of the State Property that areSubject to Privatization in 2014”

Authors:

VitaliyRadchenko, Partner Vitaliy.Radchenko@cms-cmck.com

Olga Belyakova, Senior Associate Olga.Beliakova@cms-cmck.com

Artem Lukyanov, Lawyer Artem.Lukyanov@cms-cmck.com