Sale of Confiscated Company of Russian Oligarch Shelkov Failed Again

This time, the auction was canceled by the State Property Fund.

The auction for the privatization of a 100% stake in the authorized capital of LLC Investagro, a former asset of Russian businessman Mikhail Shelkov, did not take place again on August 18. Shortly after the automatic announcement by the Prozorro.Sale system of another auction with a reduction in the starting price by 50% (UAH 27.5 mln), the State Property Fund canceled it by its order. 

According to the text of the order, the SPFU adopted the appropriate decision “in order to achieve the goals of privatization and ensure revenues from privatization to the state budget.”

Earlier in its statement, the agency noted that the first attempt to sell the asset did not take place precisely because of its book (starting) value, the lion’s share of which — UAH 21 mln — accounted for receivables, that is, debts of counterparties to the enterprise, as well as due to its own debt of UAH 17 mln.

“The State Property Fund may cancel the electronic auction at any stage before the day of its holding. Subsequently, the object can again be put up for auction for its full, book value. However, in the case of Investagro, obviously, alternative scenarios will be developed: reducing the debt burden of the enterprise before the sale or even creating a privatization pool (several objects that are sold as one lot) with another confiscated asset of Shelkov — Demurinsky Mining and Processing Plant,” explains Andrii Shvadchak, legal advisor to TI Ukraine.

Currently, there is no information about the announcement of the next auction.

The first privatization auction did not take place due to the disinterest of potential investors.

This publication was prepared by Transparency International Ukraine with the financial support of Sweden.