Privatization under new rules – new opportunities for investors!
Due to approved at July 28, 2022 Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding Facilitation of Enterprise Relocation Processes in the Conditions of Martial Law and Economic Recovery of the State” procedures for the sale of state property are now becoming faster, more transparent, and, accordingly, more convenient for business!
The updated norms are designed to simplify and speed up privatization, to facilitate the relocation of business from territories where hostilities are underway or there is such a threat, to restore, restart and further develop industries, to create effective prerequisites for the reconstruction and economic recovery of the state.
Regulations for the period of martial law:
- prohibition of privatization of objects located in combat zones or territories close to them, the list of which is approved by the Cabinet of Ministers of Ukraine;
- monthly provision by the Fund of information on the results of auctions to the Committee of the Verkhovna Rada of Ukraine on Economic Development;
- elimination of the need for long-term inventory, property assessment, environmental audit; a list of property is drawn up, the book value is used.
- making payment for the object before concluding the contract of sale, after signing the protocol on the results of the electronic auction (maximum 35 days after the auction instead of 90 days now);
- publication of information about privatization only on the official website of the Fund and in ETS Prozorro.Sales, without the need for publication in a printed newspaper;
- the possibility of signing the protocol on the results of the auction and the contract of sale with the help of electronic digital signatures;
- increasing the guarantee fee to minimize the participation of unscrupulous bidders to disrupt the auction;
- reduction of the exposure period of small privatization objects after the publication of the information notice and before the first auction;
- shortening the terms of holding a repeat auction and an auction using the method of step-by-step reduction of the starting price and submission of price offers;
- introduction of the concept of a pool – a privatization object, which is formed from several objects;
- privatization of large privatization objects (worth more than UAH 250 million) at electronic auctions without the involvement of advisers to prevent the leakage of information about potential buyers;
- the starting price of the object of large privatization is determined at the level of the book value of the assets, which must be brought to a fair value (estimation);
- independent analysis of information (due diligence) about the object of large privatization by a potential buyer based on documents in the virtual data room;
- verification of the winner of the buyer of the object of large privatization after the end of the auction, the unavailability of information about the participants of the auction before its end;
- privatization of property complexes with property that has been seized or encumbered with a pledge (mortgage) with retention of the encumbrance for the new owner (creditor is protected);
- automatic renewal of permits and licenses for buyers during the privatization of property complexes.
The restart of privatization in 2022 is an important step towards restoring business activity in Ukraine, strengthening and reinforcement of the economic security of our state.