Cabinet to consider privatization of utilities today

The Cabinet of Ministers plans to consider the privatization conditions for a 45.1% stake in Zakhidenergo (UX: ZAEN UK, BUY) and a 25% stake in Kyivenergo (UX: KIEN UK, N/R) at a meeting today, Interfax reported yesterday, citing an unnamed source in the Cabinet. The starting price should also be set. On June 22, 2011, the Cabinet of Ministers adopted a plan to sell 11 utility companies in 2011. Following a decision by the Cabinet, the State Property Fund should publish an official announcement in its weekly newspaper, which is published on Wednesdays. The auction itself should take place 75 days after publication. The government had said it planned to publish official announcements to sell Zakhidenergo, Kyivenergo and Cherkasyoblenergo (UX: CHON UK, N/R) in August, and later said September. Yegor Samusenko: As only DTEK, a minority shareholder in these companies, has showed interest in those stakes, we anticipate a high likelihood of privatization taking place close to the starting price. The first privatization in the electricity sector in twelve years should be a positive catalyst for the sector, but the starting auction price could scuttle a positive short-term market reaction to the news.