State reschedules Centrenergo, Donbasenergo sale for August

Ukraine’s State Property Fund, in an amendment to its privatization schedule for 2012, delayed the announcement of tenders to sell a 53.3% stake in Centrenergo (CEEN UK) and 60.8% stake in Donbasenergo (DOEN UK) until August (vs. June in its previous schedule). The SPF also noted that the sales were still subject to approval by the Cabinet of Ministers.

Alexander Paraschiy: This is actually in line with our view that the auctions were unlikely to happen this summer (see our news of February 6). Recall that Ukraine will have a parliamentary election in October – sale before the elections does not look efficient for the state. However, we do not rule out that the government will push for privatization in early autumn  – if this happens, then most likely both assets have a pre-arranged investor waiting in the wings who is close to the current country’s rulers. Still, our base case scenario is that the cabinet will postpone the auction until after elections.