According to media reports, SCM-related companies bought an additional 26.4% of Komsomolets Donbassa (SHKD: BUY – see our report today initiating coverage of the coal sector). The stake in the mine, a major steam coal producer, had been owned by Ukrrpodshipnyk (owned by the Klyuyev brothers, who are allies of SCM). None of the parties would comment. Eugene Cherviachenko: We think this report is credible, since Komsomolets Donbassa was a non-core business for Ukrrpodshipnyk. If this information is confirmed, SCM-related parties would own a stake of about ~87% in the mine. The mine is managed by the Donetsk Fuel-Energy Company (DFEC), also owned by SCM, which also manages the energy generator Vostok Energo, energy distributors and steam coal extractors. System Capital Management is in the process of consolidating its steam coal and energy assets under DFEC, which is likely to launch an IPO in 2007-2008.