To the attention of potential investors of the Hotel «Dnipro»

The State Property Fund of Ukraine has analyzed of applications for the purchase of a block of shares of PrJSC «Hotel «Dnipro» in the amount of 100%.

Given the appeal about the possibility to act as a buyer of state-owned objects of entities that have the form of collective investment institutions, we note.

According to the requirements of Article 1, part 1, paragraph 10, of the Law of Ukraine «On Joint Investment Institutions», a collective investment institution is a corporate or mutual fund.

Part 1 of Article 8 of the Law of Ukraine «On Joint Investment Institutions» stipulates that a corporate fund is a legal entity formed in the form of a joint stock company and conducts exclusively joint investment activities.

In this case, in accordance with Part 1 of Article 41 of the Law of Ukraine «On Mutual Investment Institutions» mutual fund is a set of assets owned by members of such a fund on the right of joint ownership, managed by an asset management company and accounted for separately from its business activities .

Part 2 of Article 7 of the Law of Ukraine «On Joint Investment Institutions» stipulates that a joint investment institution may be term or open-ended.

A term collective investment institution is created for a certain period of time, established in its regulations. After which the collective investment institution is terminated, if in accordance with the provisions of paragraphs four or five and in compliance with the requirements of paragraphs six and seven of this part, no decision is made to extend the term of such a collective investment institution.

A closed-end collective investment institution may only be term.

The term of activity of a term corporate fund may be extended by the decision of the general meeting of participants of the fund.

The term of the term mutual fund may be extended by the decision of the company's body on asset management of the fund authorized to amend its regulations.

In case of prolongation of the term of activity of a term institution of joint investment, the securities of such institution must be redeemed from its participants, who within three months from the date of this decision submitted a written application for redemption of securities from them, and from a corporate investment fund participant - also for provided that this participant did not vote for the decision.

Such redemption is carried out at the estimated value as of the date of the decision to extend the term of the term investment institution, and the number of securities repurchased from the participant may not exceed the number of securities he owned on the day of the decision. The procedure for mandatory redemption of securities of a collective investment institution shall be established by the Commission.

The term for which the activity of a term collective investment institution continues may not exceed the term of activity of such mutual investment institution provided by its regulations on the day of registration of these regulations. The number of decisions to extend the term of a term investment institution is not limited.

An indefinite mutual investment institution is created for an indefinite period.

We draw your attention to the fact that in accordance with the requirements of Part 1 of Article 8 of the Law of Ukraine «On Privatization of State and Municipal Property» buyers of privatization objects, subject to the restrictions established by this article, may be:

1) citizens of Ukraine, foreign citizens;

2) legal entities registered on the territory of Ukraine, except for those provided for in part 2 of this Article;

3) legal entities of states other than those provided for in part 2 of this Article.

We also additionally inform that according to paragraph 5 of part 2 of article 8 of the Law «On Privatization of State and Municipal Property» buyers who are registered in offshore zones (according to the list defined by the Cabinet of Ministers of Ukraine) with non-transparent ownership structure cannot be buyers of objects of state property (beneficial owners of which are not disclosed by 100 percent).

Thus, taking into account the requirements of current legislation of Ukraine, we inform:

-         Buyers of state-owned objects may be term and indefinite joint investment institutions in the form of corporate funds, provided that the ownership structure is transparent and the beneficial owners are 100% disclosed. In this case, the terms for which term joint investment institutions are established may not be less than the term of fulfillment of obligations by the buyer under the contract of sale and the period of stay of the terms of this agreement under the control of the privatization body;

-         mutual investment institutions in the form of mutual funds cannot act as buyers of state-owned objects.