Law of Ukraine

“On Specifics of Sale of State-Owned Blocks of Shares in the Statutory Capital of Banks where the State Took Part in Capitalization”

Date of entry into force:
April 14, 2012

The Law determines the specifics of selling state-owned blocks of shares in the statutory capital of banks where the state took part in capitalization according to the Law of Ukraine “On Top-Priority Measures to Prevent Negative Consequences of the Financial Crisis and Amendments to Certain Legislative Acts of Ukraine”.

Article 1 of the Law provides definitions of terms used in it. For example, “banks” mean banks with statutory capital containing blocks of shares that were purchased by the state according to the Law of Ukraine “On Top-Priority Measures to Prevent Negative Consequences of the Financial Crisis and Amendments to Certain Legislative Acts of Ukraine”.

According to Article 2 of the Law, sale of blocks of shares of banks is carried out for the purposes of:
  • regaining the funds of the State Budget of Ukraine that were earlier allocated by the state for participation in capitalization of banks;
  • ensuring further stable work of the banks;

The objects being sold are blocks of shares of banks held in state ownership as of the day of the Law taking effect and which the Cabinet of Ministers of Ukraine decided to sell (Article 3 of the Law).

The entities involved in the sale of blocks of shares of banks, according to Article 4 of the Law, are:
  • the state, in the person of the Ministry of Finances of Ukraine;
  • buyers.
Participants of the sale of blocks of shares of banks are competition entrants and the advisor on the sale of blocks of shares of banks.

According to Article 5 of the Law, strategic investors can be banking institutions and/or banking groups, resident and non-resident, that satisfy the requirements set by the National Bank of Ukraine regarding impeccable business reputation and satisfactory financial state. Strategic investors cannot be persons who, as of the time of the banks’ capitalization by the state, held a considerable interest in such banks; and/or persons registered in states that are included in the list of off-shore areas according to the Cabinet of Ministers of Ukraine, and in states included by the Financial Action Task Force on Money Laundering (FATF) in the list of states that do not cooperate to prevent money laundering; as well as the advisor on the issues of sale of blocks of shares of banks.

Article 6 of the Law envisages that in order to evaluate the blocks of shares of banks, receive recommendations on the procedure for planning and holding the sale of blocks of shares of banks, selecting strategic investors, and resolving other issues related to the sale of blocks of shares of banks, the Ministry of Finances of Ukraine involves an advisor in the issues of sale of blocks of shares of banks. The advisor on the sale of blocks of shares of banks can be an investment bank, an international legal firm, or their association, that satisfy the following qualification criteria:
  • at least twenty years of experience in consulting governments in the sphere of selling state-owned banks or banks with a state-owned share of capital, and of successful administration of appropriate agreements; in particular, a minimum of five years of carrying out such work in Central and East European states and in other emerging economies;
  • presence of representative offices in Ukraine and in a minimum of six European Union countries;
  • lack of creditor claims against the banks;
  • lack of obligations to provide services as an advisor on sale of blocks of shares of banks before affiliated persons of the banks, their creditors and/or debtors, during the last two years;
  • lack of obligations before any third party to provide services in purchasing blocks of shares in Ukrainian banking institutions for the benefit and at the expense of such third parties.

According to Article 7 of the Law, sale of blocks of shares of banks is carried out without splitting such blocks, in the following stages:
  • procuring services of an advisor on the sale of blocks of shares of banks;
  • preparing the blocks of shares of banks for sale;
  • approving the competition procedure;
  • determining the beginning value of the blocks of shares of banks;
  • passing a resolution to sell the blocks of shares of banks;
  • creating a commission on the sale of blocks of shares of banks, approving its member composition and the provision on the commission;
  • holding the competition and determining the winner;
  • granting authority to sign the sale and purchase agreement for the block of shares of banks, and approving the draft of such agreement;
  • concluding the sale and purchase agreement for the block of shares of banks with the competition winner;
  • recording the buyers’ title of the block of shares of banks.

The requirements to holding the competition are determined by Article 9 of the Law.

The beginning value of the blocks of shares of banks shall be determined according to Article 10 of the Law.

The resolution to sell blocks of shares of banks is passed by the Cabinet of Ministers of Ukraine based on the proposal of the Ministry of Finances of Ukraine (Article 11 of the Law).

According to Article 12 of the Law, in order to sell blocks of shares of banks, the Cabinet of Ministers of Ukraine creates a commission on sale of such blocks of shares, which includes representatives of the Ministry of Finances of Ukraine, the Ministry of Economic Development and Trade of Ukraine, the Ministry of Justice of Ukraine, the State Property Fund of Ukraine, and the Securities and Stock Market National Commission of Ukraine. Members of the commission on sale of blocks of shares of banks cannot be shareholders in any banks on the territory of Ukraine or acquire rights of bank shareholders within three years after the blocks of shares of banks are sold according to the Law. The work of the commission on sale of blocks of hares of banks is regulated by the provision on such commission, approved by the Cabinet of Ministers of Ukraine.

The Ministry of Finances of Ukraine pays for the services of the advisor on sale of blocks of shares of banks and other expenses related to the sale of blocks of shares of banks, at the expense and within the limits of the funds provided for by the Law on the State Budget of Ukraine for the respective year. If the duration of the services provided by the advisor on sale of blocks of shares of banks exceeds one budget period, payment for such services is done according to the legislation and the terms of the agreement concluded with the advisor (Article 14 of the Law).

According to Article 16 of the Law, based on the results of the competition, the Ministry of Finances of Ukraine and the competition winner conclude the sale and purchase agreement for the block of shares of a bank. The essential terms of the sale and purchase agreement for the block of shares of a bank are the fixed competition terms, in particular, the buyer’s obligation to ensure further stable work of the bank. The sale and purchase agreement for the block of shares of a bank can also include terms on the mutual guarantees of the parties’ obligations. The Cabinet of Ministers of Ukraine passes a resolution to grant the Minister of Finances of Ukraine the authority to sign the sale and purchase agreement for the block of shares of a bank, and approves the draft of this agreement.
Внимание! Информация устарела из-за того, что этот раздел временно не обновляется!


вверх