Ukrainian government chooses KPMG for major privatization project

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The Ukrainian government has selected KPMG as its senior advisor for the privatization and sale of the first JSC machine-building plant in Kiev, one of the largest heavy-duty equipment manufacturing plants in Eastern Europe.

The Big Four company fended off several rivals who participated in the bidding process, as KPMG came out on top for its track record in strategic privatization and business consulting projects. The tender was announced in August, the result last week, and KPMG has started work on a project that is expected to last for months.

JSC First Kyiv Machine Building Plant was founded in 1883 and today is one of the leading machine building companies in the country and region. Among the products it manufactures are equipment for the chemical, rubber, construction, heavy industry and space sectors. The plant also repairs equipment and spare parts for players in the oil, gas, automotive, mining and metallurgical industries.

According to Ukrainian media, it will not be easy to find a private investor for the plant and its approximately 300 employees, given its size and national importance, which means that its operations are closely watched by politicians and the media. .

The sale is part of a much larger privatization strategy by the Ukrainian government. In March of this year, just before the Covid-19 outbreak, the Council of Ministers approved a decision to privatize 435 state-owned objects, including four large corporations. Along with JSC State Food and Grain Corporation, SJSC Khlib from Ukraine and SE Artemsil, JSC First Kyiv Machine Building Plant is one of these four mammoths.

The privatization proceeds are expected to reach UAH 3 billion by the end of the year, and by 2021, the government’s privatization fund aims to achieve UAH 12 billion in proceeds.

The privatization plans are a major departure from the previous national policy – between 2008 and 2018, only 93 objects were transferred to private hands. However, “under the new owners, businesses, which have generated problems and losses for years, will be run more efficiently,” said Oleksiy Honcharuk, who served as prime minister until March of this year.


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