Government of Ukraine announced about an ambitious plan to privatize about 20 state-owned enterprises, including the “Ukraine” hotel, a large shopping center in Kyiv, as well as a number of mining and chemical companies. The move is aimed at raising funds to finance military spending and stimulate economic growth.
“The budget is in the red. We need to find other ways to get money to keep the macro economy stable, help the military and win this war with Russia“, said Deputy Minister of Economy of Ukraine Oleksiy Sobolev.
Privatization as a tool to support the economy
According to Deputy Minister of Economy Oleksiy Sobolev, privatization is a necessary measure to overcome the budget deficit and ensure macroeconomic stability. The government hopes that the sale of state assets will attract investment and boost the economy.
Despite the potential benefits, privatization faces certain challenges. First, war creates risks for investors, which can reduce asset values. Second, there are concerns about the transparency of the process and possible corruption risks.
However, the government is optimistic and believes that privatization is a necessary step to ensure financial stability and economic growth. The head of the State Property Fund of Ukraine, Vitaliy Koval, emphasized the importance of a quick sale of assets to finance the country’s defense.
Largest assets for sale
Among the largest assets up for sale are the United Mining and Chemical Company (UMC.C.), one of the world’s largest titanium producers, and the Ukraine Hotel in Kyiv. A hotel that has accumulated $1 million in debt will be put up for sale with a starting price of $25 million. It is expected that the funds received from the sale of the hotel will be used to finance the needs of the army and support the country’s economy.
The future of privatization
The State Property Fund of Ukraine plans to start the process of large-scale privatization in the second half of 2024, which will include assets worth 250 million hryvnias or more. The government hopes that this step will be an important contribution to the recovery and development of Ukraine’s economy.
Journalists emphasize that the state currently owns about 3,100 enterprises, of which less than half actually work and only 15% make a profit. Last year, the five most unprofitable companies cost the state more than $50 million. The government’s ultimate goal is to retain control over just 100 companies.
