Antimonopoly Committee closes investigation against DTEK

The Antimonopoly Committee of Ukraine ruled to close
its investigation against DTEK on Dec. 28, the committee reported the same day.
The investigation was opened in 2015 at the request of state-controlled
high-voltage power grid company Ukrenergo, which claimed that DTEK was abusing
its monopoly position on the electric energy market. Ukrenergo claimed that
increased outages of DTEK-controlled power units in 1H15 had led to heightened
risks to the stability of Ukraine’s energy system at that time.

The committee concluded that DTEK does not have market
power in Ukraine’s electricity segment, which is tightly regulated. Based on
this, the committee concluded that there couldn’t have been any abuse of market
power by DTEK.

Alexander Paraschiy: The decision in favor of DTEK was fully expected, given that it’s
indeed hard to prove that anybody has any market power on Ukraine’s regulated electricity
market. Any conclusion on market power and its abuse would have required a
comprehensive investigation, and therefore, strong political will to punish
DTEK and its beneficiary owner, Rinat Akhmetov. This will is non-existing. The
ruling reduces business risks for DTEK Energy, as well as reveals its
sensitivity to the political landscape. All in all, it confirms our neutral
view on DTEKUA bonds.