Ukraine expects to get $436 mln from sale of state property in 2021
Kyiv, capital of Ukraine (Pixabay)
KYIV
Ukraine expects to get $435.7 million in revenues from selling around 900 state facilities in 2021 as a part of large-scale privatisation, Konstantin Koshelenko, deputy head of the State Property Fund, said.
The country’s economy has been hit hard by the COVID-19 pandemic restrictions and contracted by 4.4 percent last year. In the first quarter of this year, Ukraine’s gross domestic product (GDP) contracted by 2 percent year-on-year, casting doubt on 2021 growth predictions, which are in the range of 4-5 percent.
The government sees proceeds from privatisation as one of the channels to fill gaps in the state budget.
“There are already more than 900 facilities pending privatization. The first quarter was quite successful and, according to the results of the auctions, $36.3 million is to be transferred to the budget,” Ukrinform cited Koshelenko as saying.
“The privatisation mechanism works, we see that investor confidence has been restored.”
He said that United Mining and Chemical Company (UMCC) and the First Kyiv Machine-building Plant were among the facilities being prepared for privatisation.
The UMCC consists of two mining and refining plants located in Dnipropetrovsk and Zhytomyr regions.
He also noted that the companies listed for privatisation tended to have financial problems.
“They are not of strategic importance. They need investment because the equipment is worn out,” Koshelenko said.
In March, Ukraine’s parliament passed the bill lifting the ban on large-scale privatisation auctions, imposed in 2020 in connection with the coronavirus pandemic.
S&P Global Ratings reaffirmed Ukraine as “B with a stable outlook” in terms of long-term and short-term liabilities in foreign and national currencies in March.
The rating agency said Ukraine’s growth, the balance of payments and finances “exceed our expectations” in 2020 and praised the finance ministry for finding its way through the crises linked to the global slowdown.
It said that risks remained in a reference to Ukraine’s failure to secure further credits from an International Monetary Fund programme and difficulties associated with the COVID.
Ukraine expects to receive $2.2 billion spread across three tranches from the International Monetary Fund in 2021, but needs to demonstrate more progress on reforms to secure funds.
The IMF approved a $5 billion programme last June to support Ukraine’s economy as it fell into recession due to the coronavirus pandemic.
May 19, 2021