KIEV (Reuters) - Ukraine will privatise the thermal power producer Centrenergo in the second quarter of 2021 after finally succeeding in changing the company’s management amid bomb threats and a legal battle, the head of the State Property Fund told Reuters on Friday.
The State Property Fund, which oversees privatisations in the government, has fought to change the management of Centrenergo, which supplies power to the Kiev region and parts of eastern Ukraine.
The tussle even led to Centrenergo setting up a temporary headquarters surrounded by barricades and barbed wire at a sanatorium in the Kiev region, the fund’s chief Dmytro Sennychenko said in an interview.
President Volodymyr Zelenskiy’s administration is targeting major privatisations as a way of raising revenue and reforming companies long seen as beholden to vested interests and a drain on the state budget.
The economic crisis caused by the coronavirus pandemic pushed much of that process to next year.
“We have created a commission, now we will choose a privatisation adviser,” Sennychenko said.
“This will be a consortium or investment bank, which will subsequently carry out all the necessary procedures for preparing the enterprise for privatisation.”
Sennychenko spoke after unveiling a new general director for Centrenergo, who took charge after the government overcame a legal challenge from interested parties who wanted the old management to remain in place.
Sennychenko said the previous management declined to publish its financial report for 2019, during which time he estimates the company incurred losses of more than 2 billion hryvnia ($74 million). The previous management did not respond to a request for comment about the loss.
Sennychenko said it would only be able to determine a price for Centrenergo once the company had been audited, and its losses and debts assessed.
The fund has previously complained of bomb threats to its offices that were intended to stop it meddling in the company.
Sennychenko took the new general director to Centrenergo’s headquarters at the sanatorium on Friday.
“We were escorted by police, so we were not hindered because we had all the legal documents in our hands,” he said.
Editing by Matthias Williams and Alison Williams
Our Standards: The Thomson Reuters Trust Principles.