Privatization 2016  in Ukraine: Opportunities for Investors

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Privatization 2016 - Opportunities for Investors
March 2016
Igor Bilous
Chairman of the State Property Fund of Ukraine

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• WE UNDERSTAND: PRIVATE OWNER IS MORE
EFFECTIVE THAN STATE.
• WE MAKE ALL PROCEDURES AS SIMPLE AS POSSIBLE.
• FULL TRANSPARENCY, NO REGULATIONS, NO
RESTRICTIONS.
IMPORTANCE OF PRIVATIZATION
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OUR PRIVATIZATION PRINCIPLES
• TRANSPARENCY OF PROCEDURES
• Transparent procedure from announcement to auction;
• No specific constrains to participate.
• COMPLIANCE WITH NATIONAL LEGISLATION
• Clear regulation exceptions for process;
• Investment obligation taken by investor;
• Funds origination.
• RISK MITIGATION
• Information disclosure
• Access to assets and mitigation
• Clear sale & purchase agreement
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PRIVATIZATION PROCEDURE (approx. 8 months)
Decision on
SOE Privatization
(CMU act)
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Tender Committee (TC)
formation to prepare
requirements for
qualified investors
SOE inventory,
independent audit
& valuation
CMU act approves
TC propositions
TC approves
the announcement date
and the auction date
Announcement
publication in
the SPFU Bulletin
Auction Day
& Winner
Selection
Closing Period
(agreement &
AMC approval)
2 3 54
TC meetings to define
starting price &
fixed requirements.
Approval by International
Working Group
76 98
≈ 1 month ≈ 3 months ≈ 1 months ≈ 5 days ≈ 2 months
≈ 2 weeks ≈ 1 week ≈ 1 week 30-45 after
announcement

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ABOUT
450
ASSETES,
including:
Big Enterprises 20
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380
Medium Enterprises
Small Equities & Units
number of
assets (units)
FOR PRIVATIZATION IN 2016

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“Odesa Portside Plant” Privatization
Advisory Group:
OPP – the leading CEE nitrogen fertilizer producer
Assistance:
Key Workstreams:
•Lead Advisor
•Valuation & Modeling
•Communication with bidders
•Legal VDR & VDD
•Input in Terms & Conditions of Privatization
•Assistance in DD
•Financial and Tax DD
•Preparation of Virtual Data Room
•Preparation of Reports
•Coordination of work with OPP on the ground
•Assistance in analysis and marketing
Partners to Winner:
•Financial Assistance for Privatization on
International Standards
•Possible financial cooperation for the plant
development (with the buyer of OPP)

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“Energy DISCOs” Privatization
Kharkivoblenergo Mykolayivoblenergo
Zaporizhyaoblenergo Termopiloblenergo
Cherkasyoblenergo Khmelnitskoblenergo
Regional Energy Distribution Companies with
controlling state stake (51-100%)
Advisor:
Assistance:
Key Workstreams:
•Pre-privatization advice
•Review of Contracts and Obligations
•VDD and Data Room
•Energy Privatization Communication Strategy
•Financial & Legal Privatization Advisory
•Financial Assistance for Privatization on
International Standards

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“Tsentrenergo” Privatization
Advisory Group:
Produce about 10% of electricity in Ukraine
Assistance:
Key Workstreams:
•Lead Advisor
•Valuation & Modeling
•Communication with bidders
•Legal VDR & VDD
•Input in Terms & Conditions of Privatization
•Assistance in DD
•Financial and Tax DD
•Preparation of Virtual Data Room
•Preparation of Reports
Partners to Winner:
•Financial Assistance for Privatization on
International Standards
•Possible financial cooperation
TBD
TBD
TBD
TBD

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WHO CAN PARTICIPATE IN PRIVATIZATION
FOREIGN LEGAL ENTITIES AND INDIVIDUALS
ARE WELCOMED TO THE PROCESS OF PRIVATIZATION
EXCEPT:
- State business entities or their subsidiaries of any legal form
- Persons incorporated in off-shore zones or listed in FATF list
- Legal entities or individuals on any sanction list
- Companies that are controlled by the persons specified
- Ukrainian entities with 25%+ state-owned stake
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STEPS TO BUY THE STATE-OWNED ENTERPRISE
• APLICATION PROCESS
- due-diligence
- visit the unit and meet management teem
- make security deposit
• PARTICIPATE IN AUCTION
- verification of compliance
- propose the best price in auction
- win the auction
• AGREEMENT & PAYMENT
- signing the contract for sale
- permission from Antimonopoly Committee
- payment
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Thank you for your attention!
Contact details:
igor.bilous@spfu.gov.ua
+38 (044) 200-33-93