Ukraine's state property fund announces repeated auction of Zaporozhye Industrial Aluminium Plant

AL Circle

Contradictory to August 2024's decision of cancelling the auction, State Property Fund has scheduled a repeated auction for the state-owned stakes of ZaporozhyeIndustrial Aluminium Plant JSC, a company in Ukraine that was known as the producer of aluminium bars and cylindrical ingots.

Ukraine's state property fund announces repeated auction of Zaporozhye Industrial Aluminium Plant
Image Source: Wikimapia

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As per a regional media correspondent's report, the Ukrainian State Property Fund revealed the statement on social media. "On November 7, 2024, an online auction is expected to be held for the privatisation of the state-owned block of shares in the amount of 97.5458 per cent in the authorised capital of Zaporozhye Industrial Aluminium Plant JSC, totalling 607,446,012 shares," the report states.

The enterprise, at the moment, is known to include 18 state-owned objects which were not added to the company's authorised capital and remained in state ownership (two shelters, devices, radio stations, utility networks, highways, etc.).

Vitalii Koval, a key figure in the State Property Fund, had said earlier, "ZAP is certainly of interest to potential investors. Especially as a brownfield site with developed infrastructure. This opens opportunities to create new industries, contributing to the region's economic development."

The business' accounts owed surpassed UAH 6.7 billion, and compensation arrears were UAH 14.1 million as on June 30, 2024. However, the previously announced privatisation auctions for the state-owned block of shares in the industrial aluminium plant went astray resultant to the dearth of bidders.

On an optimistic note, from October 29 to November 1, 2024, the Ukrainian State Property Fund held nine successful privatisation auctions, having raised UAH 112.7 million in the state budget.

In February, the State Property Fund increased its stake in the Zaporozhye Aluminium Plant from 68 per cent to 97.5 per cent. This followed a complex ownership history, beginning with the sale of a 68 per cent stake to Avtovaz-Invest in 2001. By 2006, Velbay Holdings Limited, controlled by Rusal and its primary beneficiary, Oleg Deripaska, had acquired the plant. Deripaska's companies eventually controlled 97.5 per cent of the shares. However, a 68 per cent stake was returned to state ownership in 2015 following litigation, and the remaining 29.5 per cent was ousted in February 2023 by the High Anti-Corruption Court.

Zaporozhye Aluminium Plant was once Ukraine's sole producer of primary aluminium, with a capacity to smelt over 100,000 tonnes annually. The complex mainly produced alumina and primary aluminium, and the Dneproges hydroelectric power station generated electricity for the complex. The plant's operations have been gradually reduced, with the alumina division shutting down in March 2009, the electrolysis shop in April 2011, and the foundry in July 2014. The company's main revenue streams are property leases and the sale of assets and inventories, but it continues to operate at a loss.



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