Photo from UNIAN
Ukrainian President Volodymyr Zelensky was pleased with the auction.
Head of Ukraine's State Property Fund (SPF) Dmytro Sennychenko says the SPF has sold Dnipro Hotel located in the center of Kyiv via an online auction for UAH 1,111,111,222.22, or US$41 million, whereas the starting price was set at UAH 81 million, or US$2.99 million.
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Why it was put up for sale
"We've proved that fair prices may be achieved with fair, transparent rules and disclosure of information, when everyone knows everything. The investor received a gorgeous asset, while the state got rid of a non-core asset. We expect the investor to fulfill the investment commitments and social guarantees, and keep the [hotel's] name unchanged," he said on Facebook on July 15.
Zelensky's reaction
Ukrainian President Volodymyr Zelensky was pleased with the auction.
"The auction to sell a state-owned stake in PJSC Dnipro Hotel has just ended. The price has exceeded all expectations, hitting UAH 1.111 billion. This is almost 14 times up on the starting price," he wrote on Facebook.
Zelensky stressed that the hotel belonged to the State Management of Affairs, a Ukrainian government agency, adding that he signed a decree in October 2019 to put the agency's first five facilities up for sale.
When the buyer gets the hotel's shares
According to Sennychenko, the winner of the auction will be vetted and then an agreement with the buyer will be signed within 30 days. The latter shall transfer money within another month to receive the hotel's shares.
The future of the hotel and other lots for sale
"The hotel will get a second life. It will continue operating. I hope that what President Zelensky did by transferring a non-core asset from the State Management of Affairs will be done by other 93 state agencies that manage 3,000 state-run enterprises, which, unfortunately, posted UAH 170 billion [US$6.3 billion] in losses last year. Ukraine must decide and keep real strategic enterprises to better manage them. And those that are non-core and non-strategic ones should be transferred via tenders on competitive grounds to investors for development, as we did today," he said.
Dnipro Hotel: Changes in price
In February 2020, the State Property Fund planned to sell Dnipro Hotel, located on Kyiv's European Square, at an auction with a starting price of US$10 million. Later, the starting price dropped to US$2.98 million.
The starting price after the online auction began rose to UAH 711 million (US$26.2 million) from UAH 80.923 million (US$2.98 million).