80% of Assets at Ukraine's State Property Fund Are Non-Liquid, New Chairman Reveals

Inside Ukraine's State Property Fund: A Grim Assessment

According to Главком: Dmytro Natalukha, the newly appointed head of Ukraine's State Property Fund (SPFU), has laid bare the agency's severe troubles in a recent interview. According to him, over half of the more than 2,000 enterprises under the Fund's management are mere 'shells'-existing only on paper. Furthermore, a staggering 70-80% of its assets are illiquid, and the enterprises carry massive debts. Natalukha also highlighted a critical staffing shortage and resistance to change within the organization.

Appointed in January, Natalukha took over an agency that had been without a permanent leader since 2024, when his predecessor Vitaliy Koval moved to a government post. In his first 100 days, he managed to boost the success rate of privatization auctions from 7% to 22%. Weekly deal volume jumped from two to nine, and nearly 1 billion UAH in revenue flowed into the state budget-half of the entire year's privatization target. This marks a significant shift for an agency that has long struggled with inefficiency.

Upcoming Sales and Mounting Challenges

The Fund plans to auction off several major assets, including:

• Ocean Plaza shopping center
• Odesa Portside Plant
• Sumykhimprom
• Demurynsky Mining and Processing Plant
• Mykolaiv Alumina Plant
• Indar pharmaceutical company

However, preparations for the Ocean Plaza sale have already sparked controversy. On June 18, law enforcement raided the Fund's offices as part of an investigation into potential abuses during the sale's preparation. The state currently holds 66.65% of Ocean Plaza's shares, with a debt of over $140 million attached to the asset.

Natalukha, a former lawmaker from the Servant of the People party and an international lawyer, noted that during his tenure, around 40 new job openings have been announced and roughly 20 new managers appointed. Of the 2,219 legal entities in the Fund's portfolio, only 274 are considered liquid. A staggering 74% of enterprises have not submitted financial reports for years. In the first quarter of 2026, just 47 out of 165 reporting enterprises were profitable.

'I knew things were bad at the Fund, but I never imagined they were this bad,' Natalukha admitted.

At the same time, the new chairman stressed the importance of successful privatization: 'Large-scale privatization and the sale of confiscated assets could multiply these figures many times over.'

A success fee of 1% on sales of sanctioned assets has been introduced, though the payment mechanism has yet to be finalized. The Fund's balance sheet includes over 1,500 seized or confiscated assets, most of which are individually designated property. Natalukha warned that 'going after Centrenergo right now would be a suicide mission for any investor,' as the company carries significant liabilities.

Looking ahead, the Fund's new leader expressed hope that rental income could nearly double, signaling intentions to improve the agency's financial health and push forward with privatization plans.

The situation described by Natalukha underscores deep structural issues in Ukraine's state asset management. With a high proportion of non-liquid enterprises and crushing debts, the State Property Fund faces urgent challenges. As the chairman suggests, privatization could be key to improving financial performance and attracting investment-but executing these plans will require significant transparency and trust from potential investors.

As the State Property Fund grapples with significant challenges, including its high proportion of illiquid assets, plans for future privatization are already in motion. Notably, seven state-owned facilities are slated for privatization in 2026, which could further impact the Fund's operations and financial recovery. This upcoming wave of sales may provide critical insights into the agency's evolving strategy amidst ongoing scrutiny and reform efforts.