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Privatization 2016 - Opportunities for InvestorsMarch 2016
Igor Bilous
Chairman of the State Property Fund of Ukraine
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• WE UNDERSTAND: PRIVATE OWNER IS MORE
EFFECTIVE THAN STATE.
• WE MAKE ALL PROCEDURES AS SIMPLE AS POSSIBLE.
• FULL TRANSPARENCY, NO REGULATIONS, NO
RESTRICTIONS.
IMPORTANCE OF PRIVATIZATION
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OUR PRIVATIZATION PRINCIPLES
• TRANSPARENCY OF PROCEDURES
• Transparent procedure from announcement to auction;
• No specific constrains to participate.
• COMPLIANCE WITH NATIONAL LEGISLATION
• Clear regulation exceptions for process;
• Investment obligation taken by investor;
• Funds origination.
• RISK MITIGATION
• Information disclosure
• Access to assets and mitigation
• Clear sale & purchase agreement
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PRIVATIZATION PROCEDURE (approx. 8 months)
Decision on SOE Privatization
(CMU act)
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Tender Committee (TC) formation to prepare
requirements for qualified investors
SOE inventory, independent audit
& valuation
CMU act approves TC propositions
TC approves the announcement date
and the auction date
Announcement publication in
the SPFU Bulletin
Auction Day & Winner Selection
Closing Period (agreement & AMC approval)
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TC meetings to define starting price &
fixed requirements.
Approval by International Working Group
76 98
≈ 1 month ≈ 3 months ≈ 1 months ≈ 5 days ≈ 2 months
≈ 2 weeks ≈ 1 week ≈ 1 week 30-45 after announcement
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ABOUT
450ASSETES,
including:
Big Enterprises 20
50
380
Medium Enterprises
Small Equities & Units
number of assets (units)
FOR PRIVATIZATION IN 2016
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PRIVATIZATION-2016: Calendar
Q1 2016 Q2 2016 Q3 2016 Q4 2016
Biggest Enterprises (controlling State Stake in %)
Odesa Portside Plant (99%)
Pre-privatization procedures
Chemical
Mykolaivoblenergo (70%)
Ternopiloblenergo (51%)Energy Distribution
Khmeknitskoblenergo (70%)Energy Distribution
Kharkivoblenergo (70%)
Dniprodzerzhinsk CHP (99%)
Sumyhimprom (99%)Chemical
Ivano-Frankivsk Lokomotiv Repair Plant (100%)
Transportation
Cherkasyoblenergo (71%)
Khersonska CHP (99%)Energy Generation
Mykolaivska CHP (100%)
Zaporizhyaoblenergo (60%)
Tsentrenergo (99%)
Odeska CHP (99%)
Energy Generation
Energy Generation
Energy Distribution
Energy Distribution
Energy Distribution
Energy Distribution
Energy Generation
Energy Generation
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“Odesa Portside Plant” Privatization
Advisory Group:
OPP – the leading CEE nitrogen fertilizer producer
Assistance:
Key Workstreams:•Lead Advisor •Valuation & Modeling•Communication with bidders
•Legal VDR & VDD•Input in Terms & Conditions of Privatization•Assistance in DD
•Financial and Tax DD•Preparation of Virtual Data Room•Preparation of Reports
•Coordination of work with OPP on the ground•Assistance in analysis and marketing
Partners to Winner:
•Financial Assistance for Privatization on International Standards
•Possible financial cooperation for the plant development (with the buyer of OPP)
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“Energy DISCOs” Privatization
Kharkivoblenergo Mykolayivoblenergo
Zaporizhyaoblenergo Termopiloblenergo
Cherkasyoblenergo Khmelnitskoblenergo
Regional Energy Distribution Companies with controlling state stake (51-100%)
Advisor:
Assistance:
Key Workstreams:•Pre-privatization advice •Review of Contracts and Obligations•VDD and Data Room•Energy Privatization Communication Strategy•Financial & Legal Privatization Advisory
•Financial Assistance for Privatization on International Standards
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“Tsentrenergo” Privatization
Advisory Group:
Produce about 10% of electricity in Ukraine
Assistance:
Key Workstreams:•Lead Advisor •Valuation & Modeling•Communication with bidders
•Legal VDR & VDD•Input in Terms & Conditions of Privatization•Assistance in DD
•Financial and Tax DD•Preparation of Virtual Data Room•Preparation of Reports
Partners to Winner:
•Financial Assistance for Privatization on International Standards
•Possible financial cooperation
TBD
TBD
TBD
TBD
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WHO CAN PARTICIPATE IN PRIVATIZATION
FOREIGN LEGAL ENTITIES AND INDIVIDUALS
ARE WELCOMED TO THE PROCESS OF PRIVATIZATION
EXCEPT:
- State business entities or their subsidiaries of any legal form
- Persons incorporated in off-shore zones or listed in FATF list
- Legal entities or individuals on any sanction list
- Companies that are controlled by the persons specified
- Ukrainian entities with 25%+ state-owned stake
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STEPS TO BUY THE STATE-OWNED ENTERPRISE
• APLICATION PROCESS
- due-diligence
- visit the unit and meet management teem
- make security deposit
• PARTICIPATE IN AUCTION
- verification of compliance
- propose the best price in auction
- win the auction
• AGREEMENT & PAYMENT
- signing the contract for sale
- permission from Antimonopoly Committee
- payment
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