Ukrtelekom takes rap for deficit

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July 12, 2001, 10 a.m. |

SPF blames budget shortfall on Ukrtelekom

(Staff and wire reports) Privatization brought Hr 1.7 billion to the state's budget during the first half of the year, the State Property Fund informed Ukrainian News.

The SPF said that the privatization of state enterprises lagged budget expectations by Hr 900 million. Officials had anticipated revenues of Hr 2.6 billion through June.

Deputy SPF head Mykhailo Chechetov blamed the shortfall on Ukrtelekom's failure to sell the state's stake in Ukrainian Mobile Communications. Chechetov said that the UMC sale could have added as much as Hr 1.1 billion to the budget.

"The disruption of the plan for incomes to the budget is completely on the conscience of Ukrtelekom," he said.

The state based its budget assumptions on receiving privatization revenue of Hr 5.9 billion this year. Revenues to the budget from privatization were Hr 2.1 billion last year.

Energo sales banned

Parliament has banned the transfer or sale of state share packages in energy companies until June 1, 2002.

The ban was contained in an amendment to a law that put a moratorium on the forced sale of property. The so-called "anti-asset-stripping" legislation is meant to protect state enterprises like oblenergos from being forced into involuntary bankruptcy by creditors.

The amendment was sponsored by Socialist deputy Oleksy Shekhovstov and received 340 votes, far more than the 226 votes needed for approval.

The SPF planned to privatize 12 oblenergo by the end of this year and begin the privatization of generating companies. However, at the end of May, President Leonid Kuchma banned the privatization of oblenergo and generating companies until the results from the sale of six oblenergo this spring can be studied.

The ban on the forced sale of property, proposed by the president, also bans the sale of property for debts from enterprises in which the state has more than a 25 percent stake.

No sale

The Industrial Policy Ministry has successfully postponed the privatization of Zorya for a year on the grounds that the plant is strategically significant. The Mykolayiv-based plant is one of Ukraine's largest producers of ship turbines and gas-pumping stations. Its main clients are Russia's Gazprom, Ukraine's Naftohaz Ukraine and Iran. The main buyers for its ship turbines are India, Greece and Vietnam.

Privatization Results

The SPF has awarded a tender for 51 percent of Mykolayiv shipyards to Interfirma, a Mykolayiv region company, for Hr 1.36 million. The starting price of the share package was Hr 1.33 million. Interfirma was the sole bidder.

An SPF source told Ukrainian News that Interfirma plans to build sailboats and fishing vessels at the yards.

The tender was announced in March. Under the tender's conditions, Interfirma will be required to overhaul and re-equip the shipyard.

The shipyard reported losses of Hr 91,100 last year on sales of Hr 577,100.


Jerelo, a securities firm, has acquired 10 percent of Ukrgrafit for Hr 1,991,600 on the Kyiv International Stock Exchange, Ukrainian News reported.

Jerelo Director Oleksandr Shinkarenko said that the company acquired 10 percent of Ukrgrafit on behalf of another company, which he declined to name.

The SPF opened bidding for the stake at Hr 0.98 per share, but the price fell to Hr 0.89 per share. Lutsenko said the SPF was forced to lower the price because only one company - Jerelo - was bidding.

"We know from experience that if it is not bought during the first trading session, then ... prices will have to be lowered more significantly later," Lutsenko said.

According to the State Commission for Securities and the Stock Market, Estonian firms Genesis Invest and Reetvex hold 19.23 percent and 18.32 percent respectively, while Hungary's Downtown Invest holds 10.7 percent and Britain's Starsurf Limited has a 20 percent stake.

Ukrgrafit monopolizes the production of electrodes for furnaces in the metallurgical industry.


The State Property Fund has canceled a tender to sell 49.56 percent of Khartron. The SPF announced the tender early last month.

Khartron develops control systems for rocket and space technology. It is the only producer of automatic docking systems for heavy space ships, control systems for energy blocs and electricity stations, and control and diagnostic systems for mainline pipelines, as well as gas and petroleum pumping stations.

The SPF previously tried to sell two 24.78 percent stakes in Khartron. Russia's space agency and the Khrunychev Space Science Center were interested, but SPF withdrew that tender as well.

The state retains 74.56 percent ownership in Khartron, of which 25 percent is managed by the National Space Agency of Ukraine.

Tender Announcements

The SPF announced a tender to sell 31.81 percent of the Fiolent machine-building plant, located in Simferopol, Ukrainian News reported.

The starting price of the share package is Hr 5,950,000. Tender conditions require the buyer to ensure at least a 10 percent profit for the enterprise.

Bids for participation in the tender will be accepted until July 27. The tender will be held on Aug. 3.

Fiolent produces electric household appliances, electric tools and audiotape recorders. Last year, it had profits of Hr 6.1 million on sales of Hr 40.5 million.


The SPF will hold a competition for a 44.88 percent stake of the Pivdendyzelmash factory, which is located in the Zaporizhia region.

The starting price of the 44.88 percent stake is Hr 12,737,000. According to the terms of the tender, the buyer will be required to clear Hr 5,600,000 in wage arrears.

On two previous occasions, the SPF has offered a 69.88 percent stake in the factory, but failed to attract bidders.

A 25 percent stake in Pivdendyzelmash is presently reserved for the state.

Pivdendyzelmash has a monopoly on the market of 25- to 75-kilowatt diesel generators for ships.


The SPF will conduct a tender for 50.01 percent of the Osnastka open joint-stock company, located in Volyn region.

The starting price of the stake is Hr 35,856,661.75. The competition will take place Aug. 15.

Osnastka produces components for wind turbines, technological lines for production of components for electric motors, automobile spare parts and agricultural equipment.
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