Ukraine makes new attempt to sell Zaporozhye Aluminum Plant, slashes starting price by half

MOSCOW. Aug 8 (Interfax) - Ukraine's State Property Fund has announced a second auction for the state's 97.5458% stake in the JSC Zaporozhye Aluminum Plant, with the starting price cut in half to UAH 75.93 million, or $1.85 million at the current exchange rate.

Bids in the auction will be accepted until the evening of August 13, Ukrainian media reported, citing information in Ukraine's Prozorro electronic trading system.

An auction scheduled for August 6 to sell this stake in the plant at a starting price of UAH 151.86 million was called off because there were no bidders.

"Zaporozhye Aluminum Plant is an excellent brownfield project, since it is located in Zaporozhye, next to the national N08 highway. The asset's advantages include the large area of structures and land parcel," the Property Fund said.

However, the plant's overdue payables total UAH 6.44 billion, and it closed 2023 with a net loss of UAH 57.2 million on revenue of UAH 0.34 million.

The company has 1,497 registered pieces of immovable property and infrastructure on its books with a combined area of 370,900 square meters, as well as 291 vehicles and pieces of specialized machinery. The company's real estate properties are located on 25 registered plots of land with a combined area of 216 hectares. However, as of the end of May 2023, company real estate with a combined area of 6,800 square meters was leased under eight contracts, the maximum duration of which is to September 1, 2065.

Under the terms of the auction, the buyer will have to pay off wage arrears and debts to the government within 18 months of taking ownership, as well as not lay off Zaporozhye Aluminum Plant workers for six months.

Zaporozhye Aluminum Plant was once Ukraine's only producer of primary aluminum, but at the end of the 2000s it began to gradually wind down operations. It shut down its alumina division in March 2009 and its electrolysis division, which produced primary aluminum, in April 2011, and finally its casting division in July 2014. The company's main sources of revenue now are leasing property and selling off assets and inventory.

The plant was controlled by Russian aluminum giant Rusal for many years, but in 2015 the Ukrainian authorities renationalized 68% of shares through the courts. Another 29.5% stake was seized for the state in February 2023 by order of the High Anti-Corruption Court in a lawsuit brought by the Justice Ministry.

The official exchange rate was UAH40.98/$1 on August 8.