Ukraine fails to sell Zaporozhye Aluminum Plant due to absence of bidders

MOSCOW. Aug 23 (Interfax) - A second auction to sell the Ukrainian government's 97.5458% stake in JSC Zaporozhye Aluminum Plant (ZAlK) at a reduced starting price of UAH 75.93 million that was scheduled for August 22 was called off due to the absence of bids, Ukrainian media reported, citing the Prozorro.Sale electronic trading system.

The latest attempt to sell the plant was a hybrid Dutch auction with a descending price. The August 14 auction to sell Zaporozhye Aluminum Plant, where the starting price was initially slashed in half to UAH 75.93 million, also failed due to the absence of bids.

Ukraine's State Property Fund first attempted to sell the state stake in Zaporozhye Aluminum Plant at an auction on August 6, at a starting price of UAH 151.86 million, but it 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 earlier.

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 about 300 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. Some of the real estate is leased.

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.

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 UAH 41.30/$1 on August 22.