Five entities declare interest in Centrenergo privatization

Five companies officially declared their interest in
participating in the privatization of a 78.3% stake in power generation company
Centrenergo (CEEN UK) by a Nov. 21 deadline, according to information from the
State Securities and Stock Market Commission. They include local company
Ukrdoninvest, which belongs to businessman Vitaly Kropachev, who controls
Ukraine’s biggest private mine and has been identified by local media to have
links to Ihor Kononenko, a close associate to President Petro Poroshenko. Local
company Balans Grup is controlled by Dmytro Kryuchkov, a businessman who is
currently under investigation in Germany and who allegedly has close ties with
the Surkis family that controls three power distribution companies in Ukraine.
The third is Forbes&Manhattan-Ukraine, a company with Canadian investments
led by Mykhailo Spketor, a former top manager of a Ukrainian group controlling
eight power distribution companies. The other two companies are non-residents,
Georgian International Energy Corporation and Belarusian petrochemical company
Neftebitumen Plant.

The tender to sell the Centrenergo stake is scheduled
for Dec. 13, with the starting price of its 78.3% stake set at  UAH 6 bln.
The tender will take place if at least two contenders are present, including at
least one foreign bidder.

Alexander Paraschiy: If the
tender occurs, we see Kropachev’s company as having the best chance of winning,
mainly because it will benefit from clear synergy gained from being Ukraine’s
biggest private non-integrated miner of steam coal. Theoretically, due to this
synergy, the value of Centrenergo for Kropachev is higher than for the rest of
the contenders. The key question, however, is whether Kropachev – or his
partners – have enough money. In any case, we still estimate that the
probability of a successful tender in December is no more than 50%.