Key blue-chip companies owned by Ukraine still not up for sale
The Ukrainian government on July 17 finally approved a list of 164 companies that it hopes to privatize this year and earn $1.25 billion for state coffers.
The biggest ones include a power generator and regional power distribution companies, and nitrogen fertilizer producer Odesa Portside Plant, which controls the sea port and ammonia pipeline from Russia across Ukraine.
But the most interesting companies are missing, including the biggest oil company, Ukrnafta, controlled by Ihor Kolomoisky’s so-called Privat Group. Turboatom, the exclusive Ukrainian turbine equipment producer in which Konstantin Grigorishin is a minority shareholder is also not up for sale. Two titanium mining and processing assets – Sumykhimprom and Zaporizhzhya Titanium-Magnesium Plant – are also off the list. The former is managed by Dmytro Firtash’s former top executive, Igor Lazakovich. The latter is part of Firtash’s titanium business. As the only producer of titanium sponge in Europe, ZTMP on July 21 announced that it started producing value-added products such as, ingots, slabs, and alloys, following the introduction of advanced technologies at the plant.
Despite the State Property Fund’s expectation of making $1.25 billion on privatization, Dragon Capital senior analyst Desnnis Sakva thinks the government’s forecasts are too optimistic. “It is hardly realistic for the government to sell such a wide range of assets within a half year, not only due to the ongoing military operation in the East and its impact on the domestic investment climate but also due to the sheer volume of underlying paperwork,” it said in a note to investors.
But Vasyl Yurchyshyn, director of economic programs for the Razumkov Center, said that privatization could be successful in Ukraine because assets are cheap. “If the competition will be open and rules are clear, then we can talk about significant revenue,” he said.
The privatization list is long because the nation urgently needs money. But sales amid the instabilities of war could prove problematic.