Kharkiv-based relay manufacturer has found an investor: can the new owner change the electronics market?
6 November 17:42
The State Property Fund has completed the privatization of the Kharkiv-based Radiorele plant, Ukraine’s largest manufacturer of low-current, miniature and electromagnetic relays for military, industrial and energy electronics. This is reported by "Komersant Ukrainian" with reference to the data of Prozorro. Sale.
100% of the company’s shares were purchased at an auction by SKTB Corporation Ukrinmash LLC for UAH 118 million. The price is almost equal to the starting price (UAH 117.2 million), as there was only one bidder.
Under the terms of privatization, the investor is obliged to pay off wage and tax arrears within six months and not to dismiss staff on its own initiative. This is a classic package of socio-economic obligations that should minimize social risks during the transition to private management.
“Radiorele sold for UAH 118 million: what is known about the buyer
“SCTB Corporation Ukrinmash” (USREOU 41233779) has been operating since 2017 in Kharkiv and specializes in R&D in natural and technical sciences, in particular, solutions for the security and defense sector: high-precision weapons, UAVs and electronic systems for the Armed Forces. The company is owned by former MP and former Deputy Minister for Strategic Industries Vitaliy Nemilostivyi (50.5%) and his son Yevhen (49.5%).
Vitaliy Nemilostivyi is a Kharkiv-based manager and civil servant who has worked his way up from industrial business to senior positions in ministries and parliament. His career combines a technical background, a law degree, and management experience in engineering and industrial policy. At the same time, his image was tarnished by a scandal with the patrol police, which led to his dismissal.
Despite the modest authorized capital of UAH 40 thousand, the company’s financial model is growing rapidly: revenue increased from UAH 3 million in 2020 to UAH 170 million in 2024, and the net result increased from minus UAH 0.5 million to plus UAH 20 million. Assets amount to UAH 1.25 billion, liabilities – UAH 1.21 billion. The company has been a VAT payer since 2020, has no tax debts, and has been participating in procurement by the Ministry of Defense since 2022.
What is the current state of Radio Relay?
Formally, the assets are significant: five buildings with an area of more than 49 thousand m² and 4 hectares of land in permanent use. At the same time, operating performance is weak: in 2024, revenue amounted to UAH 6.3 million with a loss of UAH 10.3 million. As of mid-2025, assets were estimated at UAH 193 million, current liabilities at UAH 3.23 million, of which UAH 2.51 million were overdue. The company employs 57 people.
Kharkiv Radiorele Plant is one of the oldest and most important enterprises in the Ukrainian electronics industry. Founded back in 1920 on the basis of front-line workshops for repairing telegraph and telephone equipment, it has gradually become a leading manufacturer of switching equipment in Ukraine and the former Soviet Union.
The company specializes in electromagnetic, temperature, and industrial relays, many of which have no analogues among products from the former Soviet Union. The plant’s products are used in military, industrial, energy and space technology, i.e. where reliability, accuracy and endurance are required in extreme conditions.
The main areas of production:
- electromagnetic relays
- relays for temperature protection;
- relays for industrial automation.
“Radiorele has a powerful engineering school and its own research and development base. The company’s specialists are able to solve complex problems related to switching electrical circuits and process automation.
In addition to relays, the plant also produces components for fiber-optic communication lines, which allows it to remain relevant in today’s high-tech industries.
It should be noted that in November 2022, the company was involved in a scandal. Back then, investigators from the Trap Aggressor project investigated the details of the Iranian Shahed-136 drone in partnership with the Independent Anti-Corruption Commission (NAKO). This kamikaze drone was shot down by the Ukrainian military on October 13, 2022, near Odesa.
Ukrainian intelligence officers disassembled the drone and found components manufactured by the Kharkiv State Plant “Radiorele”.
The investigators explained the following:
In 2020, due to ineffective management, it was put up for privatization. However, no investor has been found so far. And the director, Anatoliy Donets, who has remained in place since 2007, continues to manage the loss-making asset. At the same time, in 2020, in an interview with journalists, Donets complained that in 2016 they had lost their largest sales markets in Russia. Thus, he actually confirmed that by that time the Ukrainian state-owned company had been trading with the aggressor country. And this is how Ukrainian parts probably ended up in Iranian weapons.
Why the price was so low and why there was only one bidder
This is not the first attempt to sell the Radiorele. Previous auctions have failed due to lack of bids.
For the auction scheduled for November 4, 2025, the starting price was UAH 151.9 million excluding VAT, but there were no bidders. The SPF lowered the threshold to UAH 75.93 million (excluding VAT), after which a buyer came forward and paid UAH 118 million. Given the decline in production activity, debts and the need for modernization, the discount looks market-based. For a specialized investor, the added value is not so much the current P&L as the site, competencies, land, and the ability to quickly ramp up production for new contracts.
Read also: Zaporizhzhia giant for sale: what the state is offering, for how much and who might be interested
What does the investor and the state get from the privatization of the plant
For Ukrinmash, it is a synergy of R&D and production facilities: access to space, an engineering school, and the ability to vertically integrate critical components for its own and state defense programs.
For the state, it is a chance to quickly resume production of highly scarce electromechanical components, import substitution, and tax returns instead of subsidizing losses.
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Risks and bottlenecks of privatization
The key risk is the amount of capex needed to modernize the lines and certify them to meet the requirements of the Ministry of Defense and international partners. The second is the timing of the sales restart: to scale, Radiorele must quickly integrate into the supply chains of large system integrators. The third is operational transformation: changing the management culture and processes in a state-owned company is always painful. At the same time, the deal is favored by Ukrinmash’s portfolio in public procurement and a clear market in the defense industry.
In the future, the company will audit its production assets, gradually restore key areas, and start contracting and localizing components to meet the needs of the Armed Forces and partners. If Ukrinmash confirms its investment capacity at a pace close to its financial performance in recent years, Radiorele has a chance to return to the status of a core asset of Kharkiv’s electromechanical cluster.
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