The Ukrainian government will cut the starting price of a 99.567% stake in the Odesa Port Plant (OPP) during a new privatisation tender, the head of the country's State Property Fund (SPF) Ihor Bilous told journalists on August 19.
The statement followed July's tender for the chemicals plant, which has failed due to lack of bids from investors. The failure was attributed to the burden of OPP's debt to Ukrainian oligarch Dmytro Firtash's Ostchem company, and to the conflict with the Nortima company, allegedly controlled by billionaire Ihor Kolomoisky. The authorities also recognised that the starting price of UAH13.175bn ($531.6mn) was too high.
"It was decided to considerably cut the starting price to increase the number of bidders in the tender." Bilous told reporters in Kyiv. "The price could be halved."
The official said that he assesses the market value of the plant at $400mn-$450mn. At the same time, according to evaluations by market analysts in Kyiv, OPP's fair market price is no more than $300mn.
Earlier, Bilous said the Ukrainian authorities would consider a possible 30% discount for the plant. The SPF will also start talking to the government about the possibility of awarding tax preferences for future investors in the plant, and about signing a debt restructuring agreement with an investor before the sale of the plant.
The Ukrainian government intends to announce a new privatisation tender to sell the controlling stake in OPP in October.
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