Shareholders fail to convert Centrenergo to private joint stock company
12 October 2017
A shareholder meeting of state-controlled power GenCo
Centrenergo (CEEN UK) scheduled for Oct. 11 failed to occur due to lack of
quorum. At the meeting, shareholders were offered to vote for converting the
company from a public joint stock company (listed on stock exchange) into a
private joint stock company (whose shares cannot trade on stock exchanges).
With the quorum for the meeting set at 50%, only shareholders representing
11.94% of total shares signed up for the meeting.
Alexander Paraschiy: The State Property Fund, which holds a 78.29% stake in Centreenrgo,
apparently decided to skip the meeting and avoid its conversion into a private
company. There could be two reasons for such a decision: the government might
have been af-raid of the large cost of a share buyback by Centrenergo (about
UAH 0.5 bln, if all the minorities visiting the meeting demand the issuer to
buy their shares); or the government listened to claims of local brokers who
earlier filed a petition opposing Centrenergo’s conversion. Centrenergo is a
local blue chip accounting for about 1/5 of Ukrainian stock market turnover.
Its delisting would significantly harm the market. Whatever was the reason, the
lack of quorum turned out positive for CEEN stock.
apparently decided to skip the meeting and avoid its conversion into a private
company. There could be two reasons for such a decision: the government might
have been af-raid of the large cost of a share buyback by Centrenergo (about
UAH 0.5 bln, if all the minorities visiting the meeting demand the issuer to
buy their shares); or the government listened to claims of local brokers who
earlier filed a petition opposing Centrenergo’s conversion. Centrenergo is a
local blue chip accounting for about 1/5 of Ukrainian stock market turnover.
Its delisting would significantly harm the market. Whatever was the reason, the
lack of quorum turned out positive for CEEN stock.
