Azernews.Az

By Bloomberg

Ukraine may receive as much as $2 billion in privatization revenue in 2016 after postponing sales of some of its main businesses from this year, an official in charge of selling state assets said.

The sale of ammonia producer Odeskyi Pryportovyi Zavod, or OPZ, will go ahead in late January or early February, according to Oleh Bilous, the head of the State Property Fund. The fund pushed back the auction from November as the agency sought new legislation to make assets more appealing, giving potential bidders more time to prepare. Centrenergo and other power utilities will be another major privatization targets next year.

“If all goes well, we could raise as much as $1.5 billion or $2 billion from selling assets in 2016,” Bilous said in an interview in his Kiev office Tuesday. “These are ambitious goals and we have to prepare properly,” he said, adding that most tenders will take place in the first half of next year.

Disposal of state-owned companies is among main tasks to shore up Ukraine’s budget at the time when the government is locked in a conflict with pro-Russian separatists in the east. Attracting private investors is also key for overhauling the economy, mired in a recession, and untangling a net of inefficient corporate structures hurting state finances.

Starting Price

The starting price for OPZ will be $577 million, Bilous said, adding he sees investors ready to pay as much as $1 billion for the company.

The sale price could be $1.5 billion “in ideal conditions,” which would mean an improvement in Ukraine’s credit rating as well as in security and political situation, he said.

Eight to 10 mostly foreign investors have already expressed interest in OPZ, including four from the U.S. Bilous said the number could increase, adding that companies from Germany, Poland and Turkey may form separate groups for the OPZ sale.

Utility Sale

Power producer Centrenergo, which accounts for 14 percent of Ukraine’s generating capacity, may be sold for at least “hundreds of millions dollars,” according to Bilous.

Three companies with U.S. capital are among potential bidders for the utility that supplies electricity to Kiev, Kharkiv and Donetsk regions, the head of the state-assets agency said. The fund is seeking help from the European Bank for Reconstruction and Development to attract European power companies.

“Our primary goal is to bring back transparent sales of state assets,” Bilous said. “Price is the second priority. We have to show the world that we can sell assets honestly.”