In the 1990’s, the Ukrainian privatization process proved to be extraordinarily lucrative for many individuals and legal entities that acquired state-owned enterprises via auctions. Today, the Ukrainian government once again started a new wave of privatization, and even in the midst of war, and there are some interesting objects up for sale at the bidder’s well-researched discretion. But how does an investor go about buying a state-owned building at an auction?
Browsing through the State Property Fund’s list of investment opportunities, any potential investor can see that a number of properties are available for sale these days. For instance, one of the more interesting buildings that was sold on September 18, 2024, is Hotel Ukraine, a classic Soviet/Stalinist hotel in the very center of Kyiv, with 365 rooms, a restaurant, a business center, 6 conference halls and other infrastructural objects, for approximately $65 million USD. The future of this investment looks good: after Ukraine wins the war, masses of tourists and businessmen will arrive, and Hotel Ukraine will likely join the ranks of other top-notch global hotel chains in Kyiv (who could have purchased the complex via the privatization process).
Currently, auctions for many lucrative privatization objects are conducted via the Prozorro.Sale platform, run by the Ukrainian Ministry of Economy. Thus, as a first step, potential investors need to review the terms and conditions of auctions announced by the State Property Fund, many of which are now on-line via Prozorro.Sale (i.e., “Transparent Sale”). As the name suggests, this platform is designed to ensure transaction security and transparency (fair market prices, open access, etc.) between the buyer and the seller. Any investor, whether foreign or local, can look into the list of available investments, such as real estate and land, state-owned company privatization, non-performing loans, bankruptcy and liquidation targets, licenses, quotas, etc. Our recent article, “Ukrainian Privatization Opportunities and Auctions in 2024,” was published in Kyiv Post. You can find it here.
