Auction items 

Ukraine resumes and simplifies privatization procedures

On July 28, 2022, the Ukrainian Parliament adopted a series of simplification measures aimed at resuming and simplifying auctions of public companies and assets. The revival of privatization processes should attract the investments needed to sustain Ukraine’s wartime economy and help relocate businesses to safer regions.

The new legislation includes the following:

  • unblock the privatization of public enterprises where assets are mortgaged, seized or otherwise encumbered while preserving the rights of creditors;

  • transfer all valid licenses and permits to a new business owner after the acquisition of an object of privatization (i.e. simplify the post-privatization transition period), instead of obliging the new owner to obtain these regulatory authorizations as previously required;

  • for auction items worth over UAH 250 million, introducing the obligation to hold large-scale privatization auctions using the more transparent Prozzoro.Sale e-procurement system and competitive than the previous procedure (note that privatization auctions in connection with the above articles will only become possible after the lifting of martial law);

  • switch to online announcements of privatization auctions;

  • significantly reduce the preparation time for privatization: in particular, reduce the time between the date of the announcement of the auction and the signing of a respective sale and ensure that the purchase agreement with a private investor does not not exceed two months; and

  • the introduction of the obligation imposed by martial law to pay the purchase price in advance (i.e. before signing a sale and purchase agreement) after winning an auction.

The new law awaits the signature of the President and will enter into force on the day of its promulgation. The final text of the law is not yet available and further CMS updates will follow if the legislation regulates the above procedures differently.

Legislation: Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine to Simplify Business Relocation Processes During Martial Law and to Promote Economic Recovery of the State”, adopted on July 28, 2022.

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