KYIV, March 11 (Reuters) - Ukraine will take aerospace company Motor Sich back into state ownership in the near future because of its strategic importance to national security, top security official Oleksiy Danilov told a briefing on Thursday.
Motor Sich was privatised two decades ago and the United States and China have tussled over its fate, posing a dilemma for Ukraine which relies on Washington as its biggest military aid donor but is seeking to forge deeper commercial ties with Beijing.
“А decision has been made according to which the Motor Sich enterprise will be returned to the Ukrainian people, will be returned to the ownership of the Ukrainian state in a legal, constitutional way,” said Danilov, secretary of Ukraine’s Security and Defence Council.
Ukrainian President Volodymyr Zelenskiy signed a decree in January imposing sanctions on Chinese aviation firm Skyrizon, which has sought to acquire control of Motor Sich by buying stakes from its Ukrainian owners.
Washington opposed Chinese investors acquiring Motor Sich and in the final days of the administration of President Donald Trump, Washington added Skyrizon to a Military End-User (MEU) List, restricting its access to U.S. exports.
Zelenskiy’s Servant of the People Party said last week it would submit to parliament a bill on nationalising the aerospace company.
Chinese investors initiated international arbitration threatening Ukraine with several billion-dollar penalties over investments made into the company.
Danilov said that the state would compensate where private owners had invested any capital in Motor Sich. (Reporting by Natalia Zinets; editing by Matthias Williams, Kirsten Donovan)