Updated small privatization - almost four months since parliament restarted it in August 2022. During the war, despite massive shelling and skepticism about the readiness of businesses to invest under such conditions, the state had another opportunity to earn money and support the Armed Forces of Ukraine. After all, Ukraine sends to defense only the money that it earned itself, and did not attract as international assistance..
Small privatization under the new rules in the electronic trading system " Sales" And hold more than 200 successful auctions, which received an average of over 3.3 participants, and the price increased by 122%.
When asked whether small-scale privatization during the war is appropriate, businesses answered “with their feet” and come to auctions even during the most massive shelling by the Russians. For example, on Monday, December 5, 2022, while Russia was once again trying to hit the energy infrastructure, 9 out of 18 announced auctions for the privatization of state property took place.. They were attended by 26 participants. After the closing of agreements on these auctions, another UAH 78 million will go to the state budget.
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How actively have the State Property Fund and local self-government bodies put up their assets for privatization over the past four months? For which lots business competes most stubbornly during the war this year? What property did the cities manage to put up for privatization?
Does the war impede business investment in Ukraine?.
Small-scale privatization auctions did not take place from the beginning of the large-scale Russian invasion until August. After their launch in September, the state and local budgets earned UAH 1.4 billion in four months — an average of UAH 350 million per month. This is twice as much as before the start of a large-scale invasion.. Most likely, the factor of pent-up demand played.
If we compare year to year, then with the pace set in August-December, the state and communities could earn about UAH 4.5 billion - only 500 million less than in the pre-war year.
The new rules not only did not scare off potential buyers, but also significantly accelerated the auction: now you can apply for participation in a privatization auction, compete for an asset and close an agreement in a much shorter time - within a month. And time is important both for a business that needs to store products, transport teams and production, restart activities, and for the state, which directs every hryvnia earned to the Armed Forces of Ukraine.
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Billion from the State Property Fund.
Since August 2022, more than 300 participants have come to auctions of the State Property Fund. On average, almost four participants competed for one lot. And for some lots, 15 or even 27 participants competed, as was the case at the auction for the sale of the Moryak Hotel in Chernomorsk or a number of non-residential buildings in the Dnieper.
In general, the state budget received more than a billion hryvnias from the successful auctions of the Fund, with an announced value of 495 million.
If you look at the most expensive state lots for small-scale privatization after its resumption, the most active business was buying distilleries, the capacities of which allow you to store and process part of the crop. There are seven in the top ten. The State Property Fund sold them for UAH 604 million, or 3.3 times more than the starting price. Distilleries are interesting for business because they have a ready-made infrastructure: communications and rail links. Here, if desired, you can restore production or build a new one..
The most expensive lot of small-scale privatization after the resumption of trading was the Lviv Jewelry Factory, for which the winner paid UAH 185 million.
Business seeks stability. That is why almost half of the lots sold are located in the western regions of Ukraine — in the Ivano-Frankivsk and Lviv regions, business privatized property for more than UAH 800 million. Even in Rivne, which borders Belarus and where business is forced to keep in mind another aggressor neighbor, privatization brought UAH 24 million.
Entrepreneurs also consider the Kyiv region and Vinnytsia region interesting for investment: the winners of auctions in these regions have already transferred more than UAH 346 million to the state budget.
Until the end of this year, the State Property Fund plans to hold another 54 privatization auctions, 40 of which have already been announced with a total starting cost of UAH 16.3 million. Among the assets are the Myshkovitsky distillery in the Ternopil region, a state-owned stake in the amount of 50% of the authorized capital of PJSC "
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What cities give for privatization.
Local governments have different privatization indicators compared to the Fund: they held more auctions: 151 for UAH 161 million. Participants are mainly interested in real estate - square meters are privatized at 90% of auctions.
For four months of the city's work, administrative premises, basement floors of non-residential premises, garages, decommissioned buildings of boiler rooms, catering facilities, cellars, veterinary clinics, unfinished apartment buildings, dentistry, a pharmacy, an apartment and even fuel depots were given for privatization.. At the same time, three of the four objects for which communities have announced online auctions since August are being exhibited for the first time.. This means that businesses will have access to new facilities, and communities will be able to raise additional funds instead of maintaining property that falls into decay and burdens the budget during the war..
After the resumption of small-scale privatization, Lviv earned the most — UAH 35 million. Further Kyiv - UAH 27.4 million and Khmelnytsky - 6.5 million. Even in the communities in the Nikolaev and Sumy regions, where hostilities took place or are taking place this year, one auction was held. For example, 12 participants came to compete for a room in the center of Sumy and raised the price from several tens of hryvnias to hundreds of thousands.
By the end of this year, communities plan to hold at least 40 auctions in the system. The leader both in terms of the number of lots and the starting price is Lviv, which expects to earn at least UAH 11.6 million at ten auctions. If this succeeds, then in the first half of next year, the city of Lion will overcome the mark of one billion hryvnia and become the first city in the system that sold property for this amount as part of small-scale privatization for the entire time of work in the system.
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