The State Property Fund of Ukraine announced on October 9 that it had sold UMCC-Titanium, a state-owned company, to Cemin Ukraine for Hr 3,94 billion ($96 millions).
The third year of the Russian war has seen a difficult business environment and decreasing tax revenues strain Ukraine’s budget. Nearly half of its projected expenses for 2024 are covered by loans and foreign aid.
The country’s Finance Minister warned earlier this year that the state budget of Ukraine had a $5 billion gap for military expenses.
Ivanna Smachylo said in a statement that the budget will receive significant funds to strengthen our defense capabilities.
UMCC-Titanium, one of the largest producers of titanium and miners of rutile zirconium concentrator in the world.
The state property fund has managed the company since 2019. It was created by the Ukrainian government in 2014 to operate and manage the Vilnohirsk, Irshansk mines and metallurgical facilities.
Cemin Ukraine, which is a Neqsol Holding Company, was the only bidder at the auction. Nasib Hasanov, an Azeri businessman, owns the international Neqsol Holding company group. The company is the owner of Vodafone, Ukraine’s 2nd largest mobile operator.
The fund’s statement stated that the buyer was required to maintain the company’s primary activities, invest a minimum of Hr 400,000,000 ($9.7million), and pay arrears and past due payments to the state budget which amounted to Hr 609,000,000 ($14.8million) as of end-March.
The sale still needs to be approved by the Cabinet of Ministers.
The privatization is a part of the “Great Privatization” program, which was recently relaunched by the government in September to generate more revenue. Since the country’s independence in 1991, the government has been slow in privatizing large assets. This is largely because of corruption and mismanagement.
The statement said that “a number of other enterprises in this sector are planned to be privatized in the future. In particular, Demurinsky GZK” and “VSMPO Titan Ukraine”, the statement added.
Maksym Krippa, a Ukrainian businessman, won a recent online auction for Hr 2,5 billion ($61 million).
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