The Ukrainian Cabinet of Ministers has added Aerok LLC and Demurinsky Mining and Processing Plant LLC to the list of Sale of Sanctioned Assets large-scale privatization objects. These assets were previously seized from Russian oligarchs due to sanctions. The proceeds from their privatization will be used for reconstruction efforts following the Russian aggression.
The Cabinet of Ministers of Ukraine has added a 100% state share in the authorized capital of Aerok LLC and a 100% state share in the authorized capital of Demurinsky Mining and Processing Plant LLC to the list of large-scale privatization objects, according to UNN citing the Ministry of Economy.
According to the agency, the State Property Fund of Ukraine will soon hold auction commissions to propose starting prices and terms of sale for these assets. Once the Cabinet of Ministers of Ukraine approves the starting prices and terms of sale, the State Property Fund will put Aeroc and Demurinsky GOK up for privatization auctions.
“In the context of the ongoing war, the sale of sanctioned assets is extremely important for our economy. The money received from their sale will be directed to the fund for the restoration of destroyed property as a result of Russian aggression. This not only provides the necessary financial resources for reconstruction, but also emphasizes our determination to use all possible tools to support the economy and restore the country,” said Yulia Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.
Sale of Sanctioned Assets Of Aeroc
Aeroc LLC is one of the leading producers of aerated concrete products in Ukraine, with production facilities in the Kyiv and Lviv regions. The company was transferred to the management of the State Property Fund of Ukraine (SPFU) by a decision of the High Anti-Corruption Court in 2023. Before this, Aeroc was owned by the sanctioned Russian oligarch Andrey Molchanov through LSR Group (Russia). According to the company’s 2023 financial report, the value of its assets is UAH 947 million.
Sale of Sanctioned Assets Of Demurinsky Mining and Processing Plant
Demurinsky Mining and Processing Plant LLC is one of the leading mining and processing companies in Ukraine, specializing in the development of the Vovchanske complex alluvial titanium-zircon deposit in Dnipropetrovska oblast since 2006. The company was transferred to the management of the State Property Fund of Ukraine (SPFU) by a decision of the High Anti-Corruption Court in 2023. Previously, it was owned by Russian billionaire Mikhail Shelkov. According to the company’s 2023 financial report, the value of its assets is UAH 654 million.
Why The Sale of Sanctioned Assets
“These are very promising enterprises. The State Property Fund has done everything necessary to prepare them for privatization: the Fund transferred to the authorized capital the real and movable property of Demurinsky GOK, which was seized by the HACC decisions separately from corporate rights, and successfully lifted the arrests on Aerok’s corporate rights.
The next step is to sell these enterprises [Sale of Sanctioned Assets ] in the most transparent and competitive manner through open online auctions. The nationalized assets should find new effective owners who will develop production, create new jobs, and give impetus to the development of the territories and the reconstruction of Ukraine. And the money received from their privatization will be used to rebuild our country right now,” said Vitaliy Koval, Head of the SPFU.
Large-scale privatization involves the sale of state-owned assets with a book value exceeding UAH 250 million. Recently, the State Property Fund has conducted auction commissions for the sale of assets [Sale of Sanctioned Assets ] such as the Hotel Ukraina, the United Mining and Chemical Company, and the state share in the authorized capital of the Investment Union Lybid LLC (Ocean Plaza shopping center).
These auctions will be announced after the Cabinet of Ministers approves the starting prices and terms of sale. All auctions will take place in the state electronic system Prozorro.Sale. The proceeds from privatizing state-owned enterprises will go to the state budget of Ukraine, while the proceeds from privatizing nationalized assets will be directed to the fund for liquidation of the consequences of armed aggression.
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