Govt includes ZTMK in privatization list, Group DF enterprises have no priority right to buy out state stake
On November 25 of this year, the Cabinet of Ministers of Ukraine included Zaporizhia Titanium Magnesium Plant (ZTMK) in the list of objects to be privatized, and in the updated charter of the enterprise, Tolexis Trading Ltd., affiliated with Firtash's Group DF, which owns a 49% stake in the plant, does not have a priority right to buy out the state stake.
According to the press release of the State Property Fund, including ZTMK LLC in the list of privatization objects will make it possible to stop all enforcement proceedings, to ensure the further stable operation of the plant, the explanatory note to the document says.
It is clarified that the draft resolution was developed in the framework of the implementation of the plan for financial recovery created by the State Property Fund and ZTMK. It is aimed, first of all, to activate the norm of Clause 12 of Article 34 of the law on enforcement proceedings, which stops all enforcement actions in relation to state-owned enterprises or blocks of shares (stakes) of economic entities when they are included in the list of objects of small or large privatization. This allows you to open a new current account for the implementation of production activities and modernization of the plant.
Thus, ZTMK will have the opportunity to modernize production, significantly reduce the cost of production, due to which, from April 2021, it will increase the volume of finished products by 50%, which will completely bring it to a break-even level. Restoring production after years of careless management will be the first important step towards financial recovery, the press release said.
The inclusion of ZTMK in the list of privatization objects will also guarantee its protection against the possibility of starting bankruptcy proceedings, the SPF says.