About USD 8 million worth of debt owed to Ukrainian businessman Dmytro Firtash by Odesa plant is among main reasons for tender's failure

The State Property Fund of Ukraine (SPFU) has announced that a tender to sell 99.6% of shares of Odesa Port-Side Chemical Plant failed due to the lack of interest.

"The deadline for submitting bids for the tender to sell Odesa Port-Side Plant has expired today, July 18. No bids had been provided by 18:00 Kyiv time. The SPFU will have to recognize the tender as invalid due to the lack of bids," the SPFU's press service said.

The regulator claims that causes behind the lack of investors' interest in the tender, which was scheduled for July 26, include the plant's debt worth UAH 193 million owed to Ukrainian businessman Dmytro Firtash's Ostchem, limitations on the withdrawal of dividends from Ukraine, and the absence of tax privileges and benefits for the buyer amid general risks of Ukraine's economy. Another reason why investors are not interested in the chemical producer is the high starting price set at UAH 13.175 billion, or about USD 520 million.

"If we cannot handle certain problems or risks, they should be taken into account and incorporated in the sale and purchase agreement. I think it should be done together with an ad hoc privatization group along with the involvement of advisors who worked to prepare the plant for privatization," the SPFU's press service quoted Fund head Ihor Bilous as saying. In his words, proposals to be prepared by the ad hoc group shall be submitted to the Ukrainian Cabinet of Ministers soon.

"I hope that a decision on a repeat tender to sell Odesa Port-Side Plant will be taken soon,"he said.

As UNIAN reported in mid-May 2016, the Ukrainian government approved terms of privatization of a 99.6% stake in one of Ukraine's largest chemical producers, Odesa Port-Side Chemical Plant, with a starting offer of UAH 13.175 billion. The contest was scheduled for July 26, 2016. Norway's Yara Norge, IBE Trade Corp., Koch Fertilizer, LLC, CF Industries Holdings, Inc. (all three are based in the United States), and Poland's Ciech S.A. were named among potential buyers of Odesa Port-Side Chemical Plant.