Ukraine's State Property Fund Plans to Sell 80% of Its Loss-Making Enterprises as a Single Bundle

A Bold Proposal from Ukraine's State Property Fund

According to Главком: The State Property Fund of Ukraine (SPFU) is pushing forward with an unconventional idea: combine dozens of illiquid state-owned enterprises into one investment bundle and sell them off to a private buyer. That buyer would then be responsible for winding down the businesses. According to SPFU Chairman Dmytro Natalukha, roughly 70–80% of state enterprises are considered non-viable and should be shut down.

This mass liquidation strategy would see the SPFU grouping 10, 20, or even 50 companies into a single privatization lot. The winning bidder would handle all remaining closure procedures themselves. Natalukha noted that a preliminary audit revealed most state enterprises under the Fund's management are hopelessly unprofitable and only drain the national budget.

“We’ve estimated that around 70–80% of state enterprises are non-viable and should probably be wound up or liquidated. They generate nothing but losses for the budget,” Dmytro Natalukha emphasized.

Currently, liquidating a state enterprise requires a separate court case for each one, which creates a massive bottleneck. By pooling these companies together, the SPFU hopes to bypass that slow legal process. “If we stick to the usual procedure, liquidating these non-viable enterprises will take centuries,” Natalukha said.

International partners could assist in setting up a dedicated private entity to purchase this bundled package, allowing for a single-company liquidation process.

The Problem with Non-Viable State Assets

Many of the enterprises slated for this bundle haven't operated since Soviet times, while others went bankrupt in the 1990s and 2000s. Some bankrupt firms still owe decades of back wages to former employees.

“At some bankrupt enterprises, people have been waiting for their unpaid salaries for decades,” the SPFU chairman noted.

A large number of these companies exist only on paper-with no assets, no funds, and no debts. Their property was stripped out long ago, and more than half of all state enterprises are purely nominal entities.

The State Property Fund also expects higher rental income after switching to mandatory open online auctions. This move could improve the management of state assets and simplify their oversight. The SPFU hopes this initiative will finally close the chapter on these dead state enterprises.

“Admittedly, the idea looks a bit pirate-like, but it could be effective enough to put the issue of dead state enterprises to rest,” Dmytro Natalukha concluded.

This SPFU initiative could have a significant impact on Ukraine's national budget. By liquidating loss-making state assets, the government can reduce financial drains. Involving private investors in the liquidation process may also speed things up and create new economic opportunities. The push for innovative asset management highlights Ukraine's broader efforts to reform and modernize its economy amid ongoing challenges.

As the State Property Fund moves to consolidate and liquidate non-viable enterprises, the implications for national strategy are significant. This approach aligns with broader discussions about how privatization could enhance national security in Ukraine, transforming these financial burdens into potential assets for future growth.