Ukrainian Defence Industry to be transformed into 5 branch holdings

The state concern Ukroboronprom [or Ukrainian Defence Industry; an association of multi-product enterprises in various sectors of the defence industry of Ukraine – ed.]  is planned to be transformed into a small corporate centre and five sectoral research and production associations.

Source: Yurii Husiev, Director General of Ukroboronprom, in an interview with Interfax-Ukraine

Husev Quote: "This [will be – ed.] a management company owned by the state. Next, the corporate centre owns industry holdings, and they, in turn, have packages of shares in manufacturing enterprises in the form of limited liability companies.

We plan that 63 enterprises will become the basis for 5 sectoral research and production associations: armoured vehicles, aircraft repair, high-precision weapons and ammunition, radar systems and naval systems. And all this should be in a completely new format, in accordance with the principles of corporate governance of the OECD and NATO standards."

Details: Another holding, according to Husev, could be made in the direction of unmanned aerial vehicles, which is currently actively developing.

The general director specified that, including one new enterprise, the state concern currently has 119 companies.

Three enterprises, which take care of the purchase of weapons on foreign markets were transferred to the Ministry of Defence during the war [two of them temporarily – ed.]

Husev added that some enterprises will not be part of branch holdings [for example, special exporters – ed.] and will be directly subordinated to the corporate centre.

He reminded that the model of transformation of the concern into a modern defence company is implemented within the framework of a separate law signed by President Volodymyr Zelenskyy in October 2021, and within the framework of the decision of the Cabinet of Ministers of 21 March of this year on the creation of JSC Ukrainian Defense Industry through the transformation of the state concern Ukroboronprom.

Husev said that in a little more than a year, Ukroboronprom transformed 28 state-owned enterprises into LLCs.

He also explained that the JSC form for Ukrainian Defense Industry was chosen in order, on the one hand, to meet the standards of corporate governance, and on the other hand, to become a partner for international companies with which Ukroboronprom began to actively cooperate even before the start of the full-scale war.

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