Ukraine auctions iconic hotel in Kyiv’s center, other Soviet-times state properties to raise more money for army
The government sold the hotel "Ukraine" for $61 million. Other yet bigger auctions are scheduled as part of "Big Privatization"
Ukraine has auctioned off the iconic Hotel “Ukraine” in central Kyiv. The State Property Fund of Ukraine conducted the auction on 18 September, marking it as the first “Big privatization” auction since the start of Russia’s full-scale invasion.
The auctions come amid a crucial lack of $14 billion to contract existing domestic defense manufacturing capacities. Ukraine is asking partners to provide more funds necessary to keep up with Russia’s growing defense production and North Korean ammunition supplies.
LLC “Ola Fine,” owned by prominent businessman Maxim Krippa, emerged as the winner with a bid of 2.5 billion hryvnias ($61 million). This amount almost tripled the starting price of 1.05 billion hryvnias, demonstrating strong investor interest despite the ongoing war.
The Hotel “Ukraine,” a Soviet-era landmark located just 200 meters from Maidan Nezalezhnosti metro station in the Kyiv’s very center, boasts 365 rooms, 8 conference halls, a business center, and various amenities. Its prime location and historical significance make it a prized asset in Ukraine’s privatization efforts.
This auction is part of a broader initiative to privatize state-owned properties, with proceeds aimed at supporting Ukraine’s armed forces and reconstruction efforts. The next major asset slated for auction is the United Mining and Chemical Company, with a starting price of 3.9 billion hryvnias. From Soviet times, Ukraine inherited lots of public companies, which currently are mostly much less effective than their private competitors but possess significant assets valuable for potential investors.
The government hopes this successful sale will pave the way for further privatizations, attracting both domestic and foreign investments to aid Ukraine’s economic recovery and ongoing defense efforts.
In the past two years, over 1,200 state-owned small enterprises have been transferred to the State Property Fund, with most finding investors, while with Hotel “Ukraine” auctions have started for big assets. For every hryvnia of asset value, new owners are expected to invest 4 hryvnias in modernization.
The next top objects for privatization in 2024 include:
- United Mining and Chemical Company (starting price 3.9 billion hryvnias)
- Aeroc LLC (gas concrete products manufacturer)
- Demurinsky Mining and Processing Plant
- Investment Union “Lybid” (Ocean Plaza shopping mall in Kyiv)
Privatization proceeds will go to the state budget while privatization process will be conducted through the Prozorro.sales online auction system.
Related:
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- Russian attack hits power facilities in Sumy, kills one in Kirovohrad Oblast
- Ukraine approves law allowing foreigners to serve as officers in Ukrainian military
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