Ukraine's Odesa Port Plant suspends operations after privatisation tender fails

By bne IntelliNews January 3, 2017

Ukraine's Odesa Port Plant (OPP) will suspend operations due to unfavourable economic conditions, including overpriced natural gas supplied by national gas monopoly Naftogaz, the fertiliser company said in late 2016 after its failed privatisation.

"Due to the high price of natural gas supplied by Naftogaz, which is not in line with the prices of the plant's products on the global market, and taking into account the impossibility of supplying natural gas by Naftogaz in 2017 until the current debt is paid, it was decided to temporarily halt production and the plant's workshops," local media quoted from OPP's statement released on December 30.

The announcement followed the failure in early December of a second tender for the long-awaited privatisation of 99.567% in the giant plant located on Ukraine's southern Black Sea coast.

The new tender flopped despite the State Property Fund (SPF) more than halving the plant's starting price to UAH5.16bn ($200mn) following the first failed privatisation attempt in July. A successful sale was regarded as a centrepiece of Ukraine's privatisation process and essential to winning confidence of cautious foreign investors.

Meanwhile, according to a letter prepared by SPF head Ihor Bilhous, the Ukrainian cabinet has approved the plan to restructure OPP's debt to Naftogaz, the nashigroshi.org online news outlet reported. The plan foresees the gradual repayment of the debt, which totalled UAH1bn ($37mn) as of mid-December, in two years starting April 1, 2017.

Meanwhile, the Ostchem company of Ukrainian oligarch Dmytro Firtash has appealed to an Odesa region court to recognise and enforce the July 25 ruling of arbitrators in Stockholm on the recovery of $251mn from OPP in Ostchem's favour.

The Swedish court's decision provides for the recovery of $193mn of debt for gas and a $58mn penalty from OPP, Interfax news agency reported on December 28.

Related Articles

20,000 people evacuated as "sabotaged" munitions store burns in Ukraine

About 20,000 people have been evacuated following explosions at Ukraine's largest arms depot in Balakliya near the eastern city of Kharkiv after what was claimed to be an act of sabotage. The base ... more

Ex-Trump aide Manafort reported to be long-term Putin lobbyist

Paul Manafort, US President Donald Trump's former election campaign manager, struck a covert deal with Kremlin-affiliated Russian oligarch Oleg Deripaska in 2006 to promote the interests of President ... more

Almaty cost of living lowest among major cities

Kazakhstan’s largest city and business centre Almaty has dropped to last place on the Economist Intelligence Unit’s bi-annual ranking of the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss