Odesa Port-Side Plant privatization tender failed due to bad investment climate - Group DF

Odesa Port-Side Plant privatization tender failed due to bad investment climate - Group DFGroup DF has said that unfavorable investment climate in Ukraine is the main reason why no company filed a bid to participate in the tender to sell public joint-stock company Odesa Port-Side Plant, Group DF Managing Director Borys Krasniansky has told Interfax-Ukraine.

"It is sad that the privatization of Odesa Port-Side Plant failed at the first stage. On one hand, this is the result of the investment climate in the country and on the other hand – this hits the country's investment climate. It was said at the investment forum of the American Chamber of Commerce in Ukraine that the successful privatization of Odesa Port-Side Plant could be a signal for the change of investment climate. Unfortunately, this has not happened. It is clear that this is not a tragedy. New tenders will be announced, but the conditions of the tender and, of course, the price should be realistic," he said.

Krasniansky is confident that the starting price earlier announced by the State Property Fund is too high.

"In the current conditions, taking into account country's risks and reliability of raw materials supplies for the plant, it is a mistake to appraise the plant at $520 million… This price is too high!" he said.

Read also: Nobody wants to take part in Odesa Port-Side Plant tender due to high price - Ukraine's SPF

He paid attention to a ban to repatriate dividends in Ukraine.

"Actually, this ban halts investors from participating in the privatization of large facilities in Ukraine," he said.

Krasniansky said that the debt of Odesa Port-Side Plant to Group DF is not an obstacle for potential investors.

Read also: Two executives of Odesa port-side plant charged with embezzlement - Ukrainian ACPO Head

"Companies for sale almost always have debts. Moreover, often debts are the reason why they are sold. To speak that the tender failed due to this reason is wrong! It is often that the sum of the company's debt exceeds the appraised sum when large facilities are sold. Here they appraised the plant at $520 million, while the debt is $190 million plus fines [totally $250 million]. The debts are a normal state of companies for sale. Any investor understands that he will buy and he will have debts. He takes them jointly with the company," Krasniansky said.
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