UAH 205 million — the result of the privatization auction for the sale of Rivnetorf

On July 5, the State Property Fund successfully held a privatization online auction for the sale of the state-owned enterprise "Rivnetorf". The auctions have taken place in the state system Prozorro.Sale.

During the auction, the value of "Rivnetorf" has increased 4.3 times (from the starting price of UAH 47.1 million to the winning price of UAH 205 million). 12 participants competed in the auction.

The winner of the auction has 20 working days to pay the price of the lot. In addition to the winning bid he must pay VAT – UAH 41 million. In case of his refusal to pay, he will lose UAH 9.4 million of the guarantee fee.

Why did the SPFU put the company up for privatization?

Firstly, only strategic and profitable assets should remain in state ownership. Peat is not strategic - its share in the energy balance is less than 0.3%.

Secondly, as of March 31, 2023, the company's accounts payables are UAH 6.9 million, including UAH 1.8 million for salaries.

The buyer of "Rivnetorf" is obliged to repay salary debts and to the budget within six months. Also, he will not be able to fire workers on his own initiative during this period.

Thirdly, the enterprise needs investments. After almost 60 years of operation, the equipment of "Rivnetorf" is worn out and needs to be modernized. Since 2012, no investments have been made in development.

Furthermore, the private owner has more opportunities to set market salaries for managers. This minimizes the use of assets in gray profit-taking schemes.