Grigorishyn-related company buys controlling stake in Kharkiv CHPP#3
21 July 2008
The Antimonopoly Committee of Ukraine announced on Friday it gave permission to electricity distribution company Luhansk Energy Union, which is under Konstantin Grigorishyn’s control, to acquire a controlling stake in Kharkiv Combined Heat & Power Plant #3 (not traded). In 2007, Kharkiv CHPP #3 posted net revenue of USD 28.4 mln (+28.1% yoy); EBITDA of USD -1.3 mln; and net income of USD 0.8 mln. Alexander Paraschiy: According to news media, Kharkiv CHPP #3 was under the control of Kharkiv governor Arsen Avakov. He is at odds with the Kharkiv Regional Council, which is responsible for setting heating tariffs for Kharkiv CHPPs. As CHPPs’ profits are highly dependant on heating tariffs (refer to our Kyivenergo report of Sept. 2007), the conflict raises the risk that CHPP #3’s profit will decrease. In 1Q08, the company’s net losses were USD 0.07 mln (vs. USD 0.02 mln net income in 1Q07), and as of mid-May 2008, the company had a debt of USD 3.5 mln to gas suppliers. Grigorishyn, if he buys the company, has a higher chance to lobby for higher heating tariffs.
