the auction may become the most attractive in Vinnytsia

In more detail about the object, its advantages and why this auction is the most attractive in the region, Andriy Markevich, the head of the FDMU Regional Office in Vinnytsia and Khmelnytsky regions, told.

What will the new owner get?

This state-owned enterprise provides services for the production of land management documentation. In particular, it develops land management projects regarding the establishment of boundaries of administrative-territorial units, land allocation, conducts inventory, normative monetary valuation of land, etc.

The starting price at the auction is over UAH 15.6 million. In addition, you need to pay VAT – 20% of the amount.

The main property of the enterprise is located in three cities: Vinnytsia, Khmelnytskyi and Chernivtsi, and it is in these regions that the organization provides services. The staff includes 78 people. These are qualified workers who are constantly improving their skills because the enterprise is economically active.

The EMK of the Institute of Land Management is almost 1.5 hectares of land and 6.7 thousand m² of premises in three regional centers of Ukraine, a fleet of 21 cars, four of which were transferred to the needs of the Armed Forces of Ukraine, organizations and special equipment, software. In addition, the composition includes a recreation center with a bathhouse in the village of Sataniv in the Khmelnytskyi region, which is known for its mineral waters.

The Vinnytsia Research and Design Institute was handed over to the State Property Fund in 2022. It is not included in the strategically important objects, therefore it was included in the list of enterprises of small privatization.

“Today, Ukraine needs to fill the budget to finance the Defense Forces. State objects are the country’s internal reserve. That is why we are offering for privatization state property that is not included in the list of strategic objects of the country.
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The sale of such objects has a positive economic effect. After all, it is not only about replenishing the state treasury. It’s about new jobs and paying taxes, about restarting the company’s work, and what’s important, it’s about the development of territories,” noted the head of the FSMU Vitaliy Koval.

In private hands, the enterprise will be able to earn more

The main advantages of this facility are profitability and market prospects: land management services will be in constant demand. Before the full-scale invasion, the company received about UAH 1.3 million in net profit per year. After the drop in income in 2022, for 9 months of 2023, the net profit was UAH 416,000.

In addition, the institute also has passive income: it rents out premises that it does not use. These agreements remain valid for the buyer. And after the expiration of their term of validity, the new owner can decide whether to extend the contracts.

Andriy Markevich, the head of the FSMU Regional Directorate in Vinnytsia and Khmelnytskyi regions, assures that in private hands the enterprise will become more competitive on the market. After all, it will not deduct part of the net profit to the state, and therefore it will become more flexible when forming the price.

Andriy Markevich

“Now how it is happening: for example, some organization announces a tender for the production of land management documentation. The state enterprise is ready to do it for 1 million hryvnias. And the private one can do it for 800,000. “Private owners” are flexible when forming the price. They only pay taxes on their profits, while the state enterprise has still deduct a certain percentage from the state. Only part of the funds remain for development. Therefore, state-owned enterprises are limited in price formation. On the other hand, a flexible pricing policy will allow employees to be paid higher wages that will correspond to the market,” explains Andriy Markevich.

According to him, the land management institute will bring income to the new owner immediately after the purchase. All that needs to be done is to take care of expanding the market. And here, too, there is an advantage at the start: the company already has market shares in three regions.

The terms of sale of this object are standard: 6 months to keep the team. The institute has no arrears from wages and to the budget.

Buyers can view all documents and reports of the enterprise remotely

Andriy Markevich said that now it has become even more convenient to buy from the state. The State Property Fund has a virtual data room with all documents related to immovable and movable property, technical passports, licenses, primary accounting documents, reports, etc.

“These documents are located on servers administered by the State Property Fund. Any person or legal entity can access them. All you need to do is sign a non-disclosure agreement – in person or electronically using a digital signature. This is a very useful feature: a person does not buy a “cat in a bag”, but sees the real financial condition of the enterprise, the structure and types of debt, the condition of movable property, equipment, etc. And what is important – you don’t need to go to the facility for this, you can see everything online,” says Markevich .

According to him, at least two potential buyers have already signed the agreement and received access to the object’s documents. And in general, the head of the FDMU RD expects that the auction for its sale will become the most attractive in the region and the state will be able to attract tens of millions of hryvnias to the budget.

This article was produced with the support of the American and British peoples through the United States Agency for International Development (USAID) and the Foreign, Commonwealth and Development Office (UKaid). The views and opinions of the authors expressed in these publications do not necessarily reflect those of USAID, the US Government, UKaid or the UK Government.