Volume 1, Issue 1, March 2018, Page: 12-19
Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine
Kornieieva Iuliia, Department of Macroeconomic Regulation & International Economic Relations, Academy of Financial Management, Kyiv, Ukraine
Received: Nov. 4, 2017;       Accepted: Nov. 20, 2017;       Published: Dec. 24, 2017
DOI: 10.11648/j.jpsir.20180101.12      View  1053      Downloads  74
Abstract
This article analyses the use Initial Public Offering (IPO) as one of the priority ways of privatization of large state-owned enterprises, carried out in order to attract long-term investment resources and improve the level of corporate governance in Ukraine. Lack of investment resources in Ukraine causes the need of entering foreign capital markets and attraction foreign investors for privatization processes. The insufficient development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective regulation system of privatization processes. The article considers the specific to Ukrainian state-owned company’s problems of conducting IPO. Such enterprises do not meet the requirements of listing of leading stock exchanges, and therefore require the assistance of financial intermediaries and international donors in the organization of transparent privatization through the sale of shares in the stock markets. The author analysed the advantages of cooperation of Ukrainian state-owned companies with underwriters under the "firm commitment" scheme and risks in case of receiving services from a financial intermediary under the "best efforts" scheme. The article deals with guarantee mechanisms of support of privatization processes aimed at attracting foreign investments. It is emphasized that provision of additional guarantees will contribute to the inflow of capital. The author proposes a mechanism for the provision of privatization compensatory guarantees to the underwriters by international financial organizations for the successful initial public offering of shares of state-owned companies which are subject to privatization in Ukraine.
Keywords
State-Owned Enterprise, Privatization, Stock Exchange, Listing, Share, Privatization Compensatory Guarantees
To cite this article
Kornieieva Iuliia, Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine, Journal of Political Science and International Relations. Vol. 1, No. 1, 2018, pp. 12-19. doi: 10.11648/j.jpsir.20180101.12
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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