Ukrainian government to privatize cosmetics producer and ban Russian buyers
The State Property Fund of Ukraine has decided to privatize Vinnytsiapobutkhim, a producer of cosmetics and household chemicals.
Last week, Ukraine’s State Property Fund announced it was placing the starting bid at UAH301.4 million (US$7.3 million) for the company after a Ukrainian auction commission meeting.
The commission discussed the conditions for the privatization, including barring buyers from reselling, transferring, or leasing assets to sanctioned individuals or Russian representatives.
Other requirements are that the buyer maintain the company’s core operations, clear wage and budget debts within six months, and pay overdue creditor claims.
“It is important to note that accounts payable are not returned to persons subject to special economic sanctions and representatives of the Russian Federation,” says The State Property Fund of Ukraine.
The governmental body also requires ensured worker protection and no layoffs for six months.
Movement of funds
An auction date will be set after The State Property Fund of Ukraine submits the terms and price to the government for approval.
In February, the Ukrainian government added Vinnytsiapobutkhim’s entire stake to its large-scale privatization list. The chemicals producer made detergents and powders for Russia’s Nevskaya Cosmetics, owned by Viktor Kononov and Vladimir Plesovskikh, under brands such as Ushastyi Nian, Sarma, Mister Chister, Lotos, and Maks.
In July 2022, Ukraine seized Vinnytsiapobutkhim’s assets and gave them to the Asset Recovery and Management Agency. FMCG distributor Kraiteks-Service was chosen to manage and restart operations.
For over 15 years, Kraiteks-Service has been a distributor of household chemicals, cosmetics, and hygiene products in Ukraine. It has partnered with L’Oreal, Henkel, Unilever, Beiersdorf, GlaxoSmithKline, Johnson & Johnson, BIC, and Schwarzkopf.
