The Odesa Portside Plant temporarily stopped work on Dec. 30, citing a debt to state oil and gas company Naftogaz.
The state-owned ammonia producer, which has been slated for privatization for years, said that it had agreed with the State Property Fund to begin searching for companies to rent the factory for operation of a “prolonged period.”
The factory says that gas delivery prices from state-owned oil and gas company Naftogaz were too high, and that it cannot continue to work with Naftogaz “until the current debt is paid off.”
Naftogaz denied that it jacked up prices for the Odesa Portside Plant. The Cabinet of Ministers ordered Naftogaz to supply the Odesa Portside Plant with gas until December 31; the factory is now Hr 1.4 billion ($51.6 million) in debt to the state-owned gas supplier over the deliveries, and allegedly ran up Hr 600 million ($22.1 million) of the debt in December, the last month of supply.
The state-owned plant, which is one of the world’s largest producers of ammonium, also saw its director Valeriy Horbatko quit on Dec. 30. Horbatko had led the factory since 1986.
The ammonia producer has been a focus for potential privatization for nearly a decade, as successive Ukrainian administrations have attempted to sell off one of the state’s few profitable assets.
In the latest attempt to sell the plant, the State Property Fund scheduled a tender for Dec. 14. However, the move was a failure, as the fund did not received a single application to participate from the potential buyers.
First deputy head of the Odesa Portside Plant Mykola Schurikov said in a post on his Facebook page that the companies which were considered lead bidders – Ukrnaftoburinnya and DCH – withdrew their applications one hour before the deadline.
That followed on a similar failure in July, after the government received no bidders to buy the factory when it had a roughly $527 million price tag.
Many had hoped for the plant to be sold to a foreign investor, therefore keeping the asset out of the hands of one of Ukraine’s oligarchs. But a $190 million debt to Dmytro Firtash, coupled with ongoing litigation against the factory from Ihor Kolomoisky, annihilated those hopes.
Moreover, the global drop in commodity prices made the factory significantly less attractive. The factory lost Hr 419 million ($15.4 million) in the first quarter of 2016, compared to an Hr 90 million ($3.3 million) profit the year before.
