(Adds quotes, details)
KIEV Oct 19 Ukraine's government on Wednesday
approved a plan to put a state-owned fertiliser plant in Odessa
back up for auction at over half the price originally sought
after the prime minister called for privatisations that did not
hurt the country's image.
The auction of the Black Sea plant is the first major
privatisation since a 2014 uprising brought in a pro-Western
leadership in Ukraine and could be a test of the government's
promise to implement economic reforms and tackle corruption.
Prime Minister Volodymyr Groysman said the starting price
for the Odessa plant would be 5.16 billion hryvnia ($200
million) - down from the $521 million reserve price set at a
failed auction last July which attracted no bidders.
The International Monetary Fund and the European Bank for
Reconstruction and Development wrote to the government in May,
warning that the high price for the plant would deter credible
investors and would harm Ukraine's image.
Groysman urged police to establish why such a high price had
been fixed last July since the failure of the attempted sell-off
had seriously damaged Ukraine's image.
"We need to show more examples of successful privatisations
that have virtually not existed in the past 10 years," Ihor
Bilous, the head of the State Property Fund, told a government
Bilous said five foreign firms had expressed an interest in
the company while the total costs for the potential winner could
reach around $600 million, according to calculations made by
The winner has also to cover $300 million debts of the plant
and to find around $100 of working capital.
(Reporting by Pavel Polityuk; Editing by Richard Balmforth)