Transparent privatization at a Dutch auction: the price of the object has doubled

On January 20, 2021, a Dutch online auction was held for the privatization of a non-residential building (sauna house) in Kyiv, as a result of which the state budget should receive UAH 507.5 thousand.

The starting price for the object was UAH 233,290. After the end of the Dutch stage, three participants expressed a desire to compete for the asset, which increased the price 2.1 times - to UAH 507,572.9, which exceeded even the starting price of the first auction.

The successful privatization of this asset is a good example of how the Dutch auction model can provide a significant increase in the value of assets

We will remind that such a privatization model provides for 3 auctions, which follow one after another, only in the case, if the previous didn't take place, that is there wasn't even 1 application for participation.

Initially, the object is sold through a regular auction on increasing the price. If such an auction did not take place, then again in 20-35 days it is possible to try to buy it cheaper - the starting price will be 50% lower than the initial one. If there are no buyers for such a price, then in a month there will be a Dutch auction on reducing the price. Then the starting price also starts from a reduced by 50% from the initial.

According to the procedure, at a Dutch auction, the starting price of an asset is reduced until one of the bidders wishes to purchase the asset. Then the price at which the fall was stopped is considered the starting price. Then all participants have the opportunity to compete for the asset for 1 round.

Information on the upcoming privatization auctions can be found by following the link.