On 9 November 2017, the Ukrainian Parliament passed at first reading a new privatisation law (Draft Law No. 7066 "On Privatisation of State Property"). The new law, once effective, will significantly simplify the privatisation process, and generally make it more investor-friendly. The draft law requires another reading in the Parliament, as well as the President’s signature and official publication, to become effective. Given the Government’s ambitious privatisation plans for the remainder of this year and for 2018, it is expected that the new privatisation law will be passed in the near future.
Amongst the key features of the new privatisation law are:
- the right of a potential buyer to initiate the privatisation of a determined state-owned enterprise (SOE);
- the right to use a foreign law to govern the sale and purchase agreement between the investor and the State (this could, for example, be English law); and
- an option to use a bank guarantee (instead of a cash payment) to secure participation in the privatisation tender.
The Government is hopeful that the proposed significant change of the privatisation rules will be the trigger of a successful, large-scale privatisation campaign. A total of 893 SOEs are to be privatised by the end of 2020.