Presentation by Igor Bilous

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Transcript of Presentation by Igor Bilous

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Privatization 2016 - Opportunities for InvestorsMarch 2016

Igor Bilous

Chairman of the State Property Fund of Ukraine

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• WE UNDERSTAND: PRIVATE OWNER IS MORE

EFFECTIVE THAN STATE.

• WE MAKE ALL PROCEDURES AS SIMPLE AS POSSIBLE.

• FULL TRANSPARENCY, NO REGULATIONS, NO

RESTRICTIONS.

IMPORTANCE OF PRIVATIZATION

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OUR PRIVATIZATION PRINCIPLES

• TRANSPARENCY OF PROCEDURES

• Transparent procedure from announcement to auction;

• No specific constrains to participate.

• COMPLIANCE WITH NATIONAL LEGISLATION

• Clear regulation exceptions for process;

• Investment obligation taken by investor;

• Funds origination.

• RISK MITIGATION

• Information disclosure

• Access to assets and mitigation

• Clear sale & purchase agreement

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PRIVATIZATION PROCEDURE (approx. 8 months)

Decision on SOE Privatization

(CMU act)

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Tender Committee (TC) formation to prepare

requirements for qualified investors

SOE inventory, independent audit

& valuation

CMU act approves TC propositions

TC approves the announcement date

and the auction date

Announcement publication in

the SPFU Bulletin

Auction Day & Winner Selection

Closing Period (agreement & AMC approval)

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TC meetings to define starting price &

fixed requirements.

Approval by International Working Group

76 98

≈ 1 month ≈ 3 months ≈ 1 months ≈ 5 days ≈ 2 months

≈ 2 weeks ≈ 1 week ≈ 1 week 30-45 after announcement

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ABOUT

450ASSETES,

including:

Big Enterprises 20

50

380

Medium Enterprises

Small Equities & Units

number of assets (units)

FOR PRIVATIZATION IN 2016

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PRIVATIZATION-2016: Calendar

Q1 2016 Q2 2016 Q3 2016 Q4 2016

Biggest Enterprises (controlling State Stake in %)

Odesa Portside Plant (99%)

Pre-privatization procedures

Chemical

Mykolaivoblenergo (70%)

Ternopiloblenergo (51%)Energy Distribution

Khmeknitskoblenergo (70%)Energy Distribution

Kharkivoblenergo (70%)

Dniprodzerzhinsk CHP (99%)

Sumyhimprom (99%)Chemical

Ivano-Frankivsk Lokomotiv Repair Plant (100%)

Transportation

Cherkasyoblenergo (71%)

Khersonska CHP (99%)Energy Generation

Mykolaivska CHP (100%)

Zaporizhyaoblenergo (60%)

Tsentrenergo (99%)

Odeska CHP (99%)

Energy Generation

Energy Generation

Energy Distribution

Energy Distribution

Energy Distribution

Energy Distribution

Energy Generation

Energy Generation

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“Odesa Portside Plant” Privatization

Advisory Group:

OPP – the leading CEE nitrogen fertilizer producer

Assistance:

Key Workstreams:•Lead Advisor •Valuation & Modeling•Communication with bidders

•Legal VDR & VDD•Input in Terms & Conditions of Privatization•Assistance in DD

•Financial and Tax DD•Preparation of Virtual Data Room•Preparation of Reports

•Coordination of work with OPP on the ground•Assistance in analysis and marketing

Partners to Winner:

•Financial Assistance for Privatization on International Standards

•Possible financial cooperation for the plant development (with the buyer of OPP)

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“Energy DISCOs” Privatization

Kharkivoblenergo Mykolayivoblenergo

Zaporizhyaoblenergo Termopiloblenergo

Cherkasyoblenergo Khmelnitskoblenergo

Regional Energy Distribution Companies with controlling state stake (51-100%)

Advisor:

Assistance:

Key Workstreams:•Pre-privatization advice •Review of Contracts and Obligations•VDD and Data Room•Energy Privatization Communication Strategy•Financial & Legal Privatization Advisory

•Financial Assistance for Privatization on International Standards

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“Tsentrenergo” Privatization

Advisory Group:

Produce about 10% of electricity in Ukraine

Assistance:

Key Workstreams:•Lead Advisor •Valuation & Modeling•Communication with bidders

•Legal VDR & VDD•Input in Terms & Conditions of Privatization•Assistance in DD

•Financial and Tax DD•Preparation of Virtual Data Room•Preparation of Reports

Partners to Winner:

•Financial Assistance for Privatization on International Standards

•Possible financial cooperation

TBD

TBD

TBD

TBD

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WHO CAN PARTICIPATE IN PRIVATIZATION

FOREIGN LEGAL ENTITIES AND INDIVIDUALS

ARE WELCOMED TO THE PROCESS OF PRIVATIZATION

EXCEPT:

- State business entities or their subsidiaries of any legal form

- Persons incorporated in off-shore zones or listed in FATF list

- Legal entities or individuals on any sanction list

- Companies that are controlled by the persons specified

- Ukrainian entities with 25%+ state-owned stake

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STEPS TO BUY THE STATE-OWNED ENTERPRISE

• APLICATION PROCESS

- due-diligence

- visit the unit and meet management teem

- make security deposit

• PARTICIPATE IN AUCTION

- verification of compliance

- propose the best price in auction

- win the auction

• AGREEMENT & PAYMENT

- signing the contract for sale

- permission from Antimonopoly Committee

- payment

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Thank you for your attention!

Contact details:

igor.bilous@spfu.gov.ua +38 (044) 200-33-93