Tycoon Vasyl Khmelnytsky buys iconic Bilshovyk plant for mere $53 million
Editor’s note: This story has been updated to include tycoon Vasyl Khmelnytsky’s comment.
Ukrainian tycoon and former politician Vasyl Khmelnytsky confirmed he bought the highly-coveted Bilshovyk machinery plant alongside his partner Andriy Ivanov and real estate developer Oleksiy Baranov for a trifling $53 million at an auction on Oct. 27.
Khmelnytsky and Ivanov bought it through an obscure company linked to the tycoon’s holding UDP.
“As a UDP shareholder, I congratulate the partners on winning the open auction,” read the statement obtained by Ukrainian news outlet Ekonomichna Pravda.
Experts believe the market price, in a fair sale, could have easily tripled the starting price, reaching up to $150 million, the Kyiv Post reported on Oct. 21.
However, the winner, a little-known company called General Commerce, paid a mere $2 million more than the starting of $51 million for the whole 35-hectare plant, standing at the crossroads of busy transport arteries leading to Kyiv’s main street Kreshchatyk.
It took only six minutes for the company to win the auction, where three investors bid $740,000 (Hr 20 million) each.
General Commerce is based in Cyprus and registered in Kyiv, with a capital of $150 (Hr 4,000). The company will also get a one-hectare plot at Trukhaniv Island in the heart of Kyiv and several smaller plots in the city.
The buyer is linked to UFuture, a holding company belonging to Ukrainian tycoon and former politician Vasyl Khmelnytsky, Novoe Vremya reported.
General Commerce already worked with Khmelnytsky’s UFuture to develop real estate in the center of Kyiv, transforming the Arsenalna plant into a popular recreational area, according to the open data analysis website YouControl.
Read also: Tycoon Khmelnytsky’s business empire gives him upper hand in Bilshovyk sale
The State Property Fund announced earlier that more than 15 investors were interested in purchasing the asset, but the vast majority backed down by fear of legal hurdles.
In 2019, five workshops on the property, taking up 6,300 square meters, were illegally sold to some private companies and leased out until 2035.
Those companies are linked to Khmelnytsky and his business partner Andriy Ivanov, Liga reported. The workshops are not in one place but scattered throughout the territory, making it impossible to build contiguously.
Industry experts concurred: only one market player could benefit from this manufactured chaos — a Khmelnytsky-Ivanov duet.
A source close to the deal, who asked not to be named to avoid retaliation, told the Kyiv Post that, in reality, there is not a single actual participant in the upcoming auction.
“They either are companies related directly to Khmelnytsky and Ivanov or have close business relations with them,” the source said.
The 650,000–750,000 square meter area can be used to build residential property, offices, hotels, hospitals or a fitness center, according to Olexander Nosachenko, CEO of Colliers real estate consultancy.
Khmelnytsky said the plant’s 35-hectare would be rebuilt to create “an innovative and comfortable infrastructure for the citizens” in the center of Kyiv.
It’s the largest state asset sold for the last 16 years, in the framework of President Volodymyr Zelensky’s Big Privatization program aimed at selling the state’s properties to fill the government’s coffers.
Read also: Shady sales: Will Bilshovyk auction be the latest in a long line of sham privatization?
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