June 16, 1999, #1137. Registered with the Ministry of Justice of Ukraine on August 3, 1999. Registration #524/3817
To implement par. 82 of Section 3 of 1999 State Privatization Program, approved by the Decree # 209/99 of the President of Ukraine of 02/24/99I ORDER: 1. To approve the Procedure for sale of state-owned securities, stakes, and other property within the property complexes of enterprises, located abroad (attached herein).
2. For the Department of interstate property relations and property located abroad – to agree upon the Procedures herein with the National Agency for State Corporate Rights, the Antimonopoly Committee of Ukraine, the Securities and Stock Market State Commission, upon which register the Procedures with the Ministry of Justice of Ukraine.
3. Cancel the "Procedure for sale of state-owned securities, stakes, other property within the property complexes of enterprises, located abroad", approved by the SPF Order #236 of 02/16/98 and registered with the Ministry of Justice on 07/02/98, registration #414/2854.
4. The supervision over implementation of this Order is left to the SPF Deputy Chairman Mr. Hlushko S.Ì.
The SPF chairman Î. BONDAR
APPROVED by the SPF Order #1137 dated July 16, 1999. Registered with the Ministry of Justice of Ukraine on August 3, 1999. Registration #524/3817Procedure for sale of state-owned securities, stakes, other property within the property complexes of enterprises, located abroad 1. General provisions
1.1. The present Procedures have been developed in accordance with the Law of Ukraine "On Privatization of State Property" and the 1999 State Privatization Program, approved by the Decree # 209/99 of the President of Ukraine of 02/24/99.
1.2. The procedure regulates (1) the conduct of sale of state owned securities, stakes, other property within the property complexes of enterprises, founded by the state enterprises and organizations whose interests are represented by the SPF of Ukraine in the capacity of founder/legal successor, and (2) the processes of alienation of state property and individual sales of inventory items that are located out of Ukraine (hereinafter – the state-owned objects).
1.3. A foreign issuer’s securities subject to sale within Ukraine shall be registered under clauses of the Regulation (on the procedure for registration of foreign issuers’ shares and bonds) approved by the Securities and Stock Market State Commission Decision #42 of 11/20/97.
2. Procedure for determination of the methods of sale
2.1. For the sale of the state-owned objects the following methods may be chosen:
- buy-out by a founder(s);
- buy-out by the entity proper, given that is allowed by the entity’s founding documents and is in compliance with the legislation of the host country;
- auction or other types of competitive sale, permitted by the valid legislation of the host country.
2.2. Buy-out scheme is used in case the founder(s) of the enterprise makes decision to realize its priority right to purchase the state-owned object. This privatization technique is applicable to (mentioned in par. 1.2) enterprises of any legal status, except for open JSCs.
2.3. Auction or other competitive sales, unless prohibited by the valid legislation of the host country, may be used:
à) in the event a founder(s) refuses to realize its priority right to purchase the state-owned object;
á) in case an open JSC shares are put up for sale.
2.4. The venue of state-owned objects sale shall be designated by the SPF of Ukraine with due regard of the legislation of the country that registered the entity and the entity’s founding documents.
3. Preparation of state-owned objects to sale
3.1. Ukrainian citizens, persons without citizenship, Ukrainian and foreign legal entities may attend and participate in the sale sessions, unless any limitations for the above persons’ participation are imposed by Ukraine’s/host country legislation.
3.2. Decision on the conduct of sale of state-owned objects shall be made on the SPF’s initiative, upon the proposal of the National Agency for Corporate Rights agreed with the Cabinet of Ministers of Ukraine, or on the basis and in response to the written request from potential buyer.
The State Property Fund of Ukraine shall advise the founder(s) of any, but open JSC, legal entity of its/their priority right to purchase the state-owned object located abroad with mandatory preliminary expert evaluation of the object in question.
The founder(s) shall within 30 days following the receipt of the above notification, unless otherwise is prescribed by the statutory documents or by the host country legislation, advise the State Property Fund of Ukraine of its/their intentions with respect to realization of the right.
Given several founders give their consent to realize their right to purchase the state owned object, each founder’s share shall be identified on the basis of the statutory documents proportionally to each founder’s stake in the statutory fund of the entity after which the size of respective share shall be agreed with each founder individually.
Given the founder(s) advises of his intention to give up its priority right or fails to rspond within the prescribed period, the SPF shall sell the objects via auction or other legal methods of competitive sale.
3.3. The State Property Fund of Ukraine shall, within one-month period following adoption of the decision on the sale, conclude an agreement on expert evaluation of the object. The agreement may be concluded with experts that are in permanent contractual relations with the Fund or with foreign experts licensed to such activity according to the valid legislation of the host country.
The expert evaluation shall be performed on the basis of the relevant international experience and within the time frame, prescribed by the applicable legislation of Ukraine.
The expert evaluation report and the conclusions shall be approved by the order of the State Property Fund of Ukraine.
3.4. On the basis of the expert evaluation results report/conclusions and within 10 days after approval thereof the State Property Fund shall develop the schedule of the respective state-owned object sale, which shall be subject to approval by the SPF order.
4. Buy-out of the state-owned objects
4.1. The right of ownership to the state-owned object, purchased via buy-out scheme, shall be confirmed by the purchase and sale agreement, which must be concluded by the buyer and the SPF within one month after the approval of the Order on the Sale Schedule.
4.2. The purchase and sale agreement shall serve as the ground for deposition of funds by the buyer (as payment for the purchased state-owned object) to the stipulated in the agreement extra-budget privatization fund bank account.
Given the buyer refuses to sign the purchase and sale agreement, the State Property Fund of Ukraine shall have the right to recover losses incurred during the preparation of the object to sale following which the object shall be subject to sale via competitive types of sale.
5. Competitive sales of the state objects
5.1. In case the founder(s) refuses to purchase the state-owned object or purchases only part of it, the unsold object (object part) shall go to the auction or shall be sold via other public competitive sale mechanism.
The State Property Fund of Ukraine shall publish information on the auction in Ukrainian and foreign languages in the local press and in the mass media of the host country at least 30 calendar days before the conduct of the auction.
5.2. The procedures of the auctions and other competitive types of sale shall be in line with the legislation of the host country.
5.3. Per the results of the conduct of auction/other type of competitive sale, the SPF and the winner shall conclude purchase and sale agreement.
5.4. The purchase and sale agreement shall serve as the ground for deposition of funds by the buyer (as payment for the purchased state-owned object) to the stipulated in the agreement extra-budget privatization fund bank account.
5.5. Given the buyer refuses to sign the purchase and sale agreement, the State Property Fund of Ukraine shall have the right to recover losses incurred during the preparation of the object to sale.
5.6. The auction expenses shall be covered by the State Property Fund of Ukraine.
Head of Department of Interstate Ownership Relations and of Property Located Abroad Î. BOBROVNIKOV
Head of Unit of Preparation of Joint Ventures to Privatization ². HOLETS |