Cabinet orders Oblenergo stakes transferred to SPF

The Cabinet of Ministers issued an order on July 29 that directed the transfer of government-held stakes in Ukraine’s power distribution companies (aka Oblenergos) to the State Property Fund for privatization, according to details of the order published yesterday. According to the Cabinet’s decree, the government-controlled National Energy Company of Ukraine (NC ECU) will retain control of 5-15% stakes in 10 of the companies. 

                           NC ECU   Passed  NC ECU
                           before   to SPF   after
Chernivtsioblenergo CHEN     70% + 1  60% + 1  10.00%
Cherkasyoblenergo   CHON   46.00%   46.00%    
Dniprooblenergo     DNON    75% + 1  60% + 1  15.00%
Donetskoblenergo    DOON    65.06%  60% + 1   5.06%
Kharkivoblenergo    HAON     65% + 1  60% + 1   5.00%
Khmelnitskoblenergo HMON  70% + 1  60% + 1  10.00%
Kyivenergo          KIEN         50% + 1  50% + 1                  
Krymenergo          KREN       70% + 1  60% + 1  10.00%
Mykolaivoblenergo   MYON     70% + 1  60% + 1  10.00%
Ternopiloblenergo   TOEN      51.00%   51.00%                  
Vinnitsaoblenergo   VIEN        75% + 1  60% + 1  15.00%
Volynoblenergo      VOEN        75% + 1  60% + 1  15.00%
Zaporizhiaoblenergo ZAON     60.25%   60.25%                   
Zakarpatoblenergo   ZOEN       75% + 1  60% + 1  15.00%
Luhanskoblenergo                  60.06%   60.06%                   

Yegor Samusenko: Though the transfer of the stakes to the SPF could happen soon, it doesn’t mean anything concrete about the timing of their privatization. The SPF, in practice, can hold these stakes as long as it is needed. In 2001, when six Oblenergos were privatized, it took six months between the relevant Cabinet decision and privatization auctions; political pressure was much higher then than now. This news is generally positive for the stocks transferred to the SPF, though it is still difficult to forecast what stakes will be sold and when.