President unblocks privatization of four GenCos, KGOKOR and Turboatom

President Viktor Yushchenko yesterday unblocked the privatization of 60%+1 stakes in electricity generation companies Dniproenergo (DNEN: BUY), Centrenergo (CEEN: BUY), Zakhidenergo (ZAEN: BUY), and Donbasenergo (DOEN: BUY); 100% of Kryviy Rih Oxidized Iron Ore (KGOKOR) and 75% of Turboatom (TATM: BUY). The new order cancelled Yushchenko’s decrees of July 21 that suspended the Cabinet of Ministers’ directive to privatize the companies. Alexander Paraschiy: While news looks positive,we do not believe the President’s new decrees means he will allow the privatizations to go ahead. (1) We recall that Yushchenko issued decrees cancelling his previous suspension of the privatizations on July 8, one day before the decree would have been considered (and, most likely, nullified) by Constitutional Court of Ukraine. Thereafter, on July 21, he backpedalled and issued a second decree suspending the privatizations again. (2) The Cabinet of Minister’s privatization order, which President unsuspended on September 29, foresees privatization by the end of 2008 (i.e. only three months left), which we believe will be difficult for the government to achieve. The President has sufficient power to suspend the privatization of these companies if they are included on the 2009 list.