The first sanctioned asset sold on Prozorro.Sale, the launch of a major privatisation and sale of the legendary Ukraina Hotel, as well as the adoption of important documents for the implementation of corporate reform – this was the year 2024 for the state property management reform. The results are summarised in a blog post by Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

“I can confidently say that the reform of state property management in 2024 has made significant progress. We have not only launched a large-scale privatisation and achieved good results, but also laid a solid foundation for further implementation of the principles of effective and transparent management of state assets,” said Yuliia Svyrydenko.

Privatisation

The year 2024 was a record year both in terms of privatisation proceeds and the scale of the objects sold by the state.

The Government launched a large-scale privatisation to sell over UAH 250 million worth of assets. New owners were found for three large-scale facilities:

• Hotel Ukraina – sold for UAH 2.5 billion. The auction increased the price by 2.5 times.
• United Mining and Chemical Company – Ukraine’s largest titanium ore mining and processing company. The company was sold for UAH 3.94 billion.
• Aerok plant – the first sanctioned asset to be sold as part of a large-scale privatisation. Its value almost doubled to UAH 1.9 billion as a result of the auction. The proceeds from the sale of the sanctioned assets will go to the fund for liquidation of the consequences of armed aggression and will be used to rebuild the country.

In total, this year’s proceeds from privatisation, both large and small, may reach almost UAH 12 billion after all transactions are completed in 2024. This is three times more than planned for 2024.

“As a result, the state has received additional revenues, and unprofitable facilities have received new owners and a chance to transform and attract investment in development. This year has shown that even despite the war, privatisation is possible and necessary,” wrote Yuliia Svyrydenko.

Corporate reform

Another area of state property management reform, corporate reform, also saw a decisive year in 2024. In March, a law improving the corporate governance (3587-IX) came into force. Its adoption allowed to take the reform to a new level and scale up the work that has been going on for 8 years.

This is an important signal to investors that Ukraine will act in accordance with the rules that are understandable to the civilised world.

The law stipulates that the Government will develop a State Property Policy, which the Government has also adopted in 2024. This is a strategic document that defines the purpose of state ownership of companies, the criteria for keeping companies in state ownership, or transferring them for privatisation or liquidation. For the first time, the state has a strategic framework on how to manage its assets in the most efficient way.

The Ministry of Economy has also approved clear criteria and a list of companies that should have supervisory boards. It has also already carried out the so-called “triage” process, which sorts companies into those that will remain in state ownership, be privatised or liquidated.

In 2024, the corporatisation of strategic enterprises also continued by transforming them from state-owned enterprises into joint-stock companies or LLCs and introducing OECD corporate governance principles. Thus, Energoatom became a joint-stock company. An independent supervisory board of Ukrenergo was formed. The corporatisation of the State Enterprise “Guaranteed Buyer” is underway, and the process of forming supervisory boards at Forests of Ukraine and Ukrainian Danube Shipping Company is ongoing.

This work will continue in 2025. The next important steps are to privatise or liquidate assets that are unprofitable for the state, to form supervisory boards at a number of state-owned companies, and to separate commercial and non-commercial activities based on the triage of state-owned enterprises.