Ukraine adopts new privatization law

On 18 January 2018, the Verkhovna Rada of Ukraine adopted Law No. 2149-VIII “On Privatization of State Property” (the “Law”) which aims to improve, advance and simplify the privatization process. The law awaits the signature of the President of Ukraine.

The Law aims to attract a wide range of potential investors, as reflected in the extension of the list of the objects subject to privatisation and the reduction in number of objects prohibited for privatization. Now privatization can be initiated not only by state bodies of privatization or authorized management bodies, but by potential buyers as well. In addition, the Law prescribes a set of measures in order to enhance the transparency of privatization processes through publication of announcements in the mass media on the course and results of privatization.

The Law unifies the approach to privatization. In particular, it introduces a new classification of state owned objects (small privatization objects and large privatization objects). Moreover, it grants the right to resolve privatization disputes at the foreign arbitration courts.

Among other issues, the Law defines the following:

• requirements for buyers of privatization objects and restrictions on their participation in the privatization process (special attention is paid to potential relations with aggressor state)
• update of privatization procedure (requirements for the formation and approval of the list of privatization objects, as well as the procedure of decision approval on privatization)
• update of requirements for auctions of small and large privatization objects
• specific features governing the purchase of shares (participation interest) owned by the state in the authorized capital of companies
• requirements for the execution of privatization deals
• requirements for transformation of a state-owned enterprise into a joint-stock company through the privatization process

A more detailed analysis will be provided following the official promulgation of the text of the Law.

Based on our considerable experience in privatization projects, Sayenko Kharenko provides a full range of services with respect to preparation for a tender, legal due diligence of privatization objects, and legal support of the tender procedure.

For further information, please contact Vladimir Sayenko or Oleksandr Nikolaichyk.