Poroshenko signs law to propel large-scale privatization in Ukraine
The President of Ukraine, Petro Poroshenko, has signed law No. 1005-VIII: "On amendments to some laws of Ukraine concerning improvement of the privatization process." The President’s press service reports that the law was adopted by Verkhovna Rada (Ukrainian Parliament) on February 16, 2016. It will improve provisions of an existing law, “On privatization of the state property,” to achieve transparency and openness in the privatization process and strengthen the protection of national interests in the process of reforming property relations.
The new law will forbid participation in privatization by registered legal and physical persons of an aggressor state as recognized by Parliament. It also applies to a state against which sanctions are levied, as well as legal entities whose owners are residents of the state aggressor.
The press service also reported that it may be possible for the government to decide that councilors shall be appointed to prepare the privatization and sale of strategic enterprises—following procedures established by the Cabinet of Ministers—that will facilitate privatization procedures in line with international standards.
Additionally, the law on privatization of state property excluded provisions on mandatory offers for sale at stock exchanges. Shares of the joint stock companies would be put on offer for 5% to 10% of the share capital for competition. This would “provide an opportunity to prevent the fragmentation of shareholdings and speed up the privatization process.”
The State Property Fund of Ukraine will be responsible for the implementation of the new law, which enters into force the day after publication. The Verkhovna Rada has been trying to adopt the law since November, 2015. Its necessity has been repeatedly advocated by Aivaras Abromavičius, the former Minister of Economic Development and Trade.
The government plans to start by privatizing the large enterprises of the joint stock company “Odessa Port Plant” (OPZ) as well as some “oblenergos” or energy distribution companies and the power generating company "Centrenergo".