№ 1/2018

№ 1/2018

Nauk. pr. NDFI 2018 (1): 33–42https://doi.org/10.33763/npndfi2018.01.033

FINANCIAL AND ECONOMIC REGULATION

KORNIEIEVA Iuliia ¹, KUZKIN Yevhen ²

¹SESE "The Academy of Financial Management"
OrcID ID : https://orcid.org/0000-0002-1823-7618
²State Agency of Motor Roads of Ukraine
OrcID ID : https://orcid.org/0000-0002-6790-8238

Privatization compensation guarantees as a tool of attracting fdi to the public sector

The article presents practical recommendations for carrying out in Ukraine a transparent, full or partial privatization of large state enterprises on international capital markets through the initial public issue of securities in order to attract investment resources. The lack of investment resources in Ukraine causes the need of entering foreign capital markets and attracting foreign investors for privatization processes. The attraction of foreign direct investment is considered as an effective resource for economic growth. The insufficient level of development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective system of regulation of privatization processes. The article considers the problems of conducting primary public issue for state-owned companies which do not meet the listing requirements of advanced 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 analyzes the advantages of cooperation with underwriters under the “firm commitment” scheme and risks in case of receiving services from a financial intermediary in the “best efforts” scheme. The article deals with guarantee mechanisms of support for privatization processes aimed at attracting foreign investments. It is emphasized that the 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.

Keywords:privatization, guarantees, foreign direct investment, state sector of the economy, international financial organizations

JEL: E22, F21, G28, H54

Kornieieva I. . Privatization compensation guarantees as a tool of attracting fdi to the public sector / I. Kornieieva, Y. . Kuzkin // Наукові праці НДФІ. - 2018. - № 1. - C. 33-42.

Article original in Ukrainian (pp. 33 - 42)

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