Cabinet Approves Odessa Portside Privatization Terms

The Cabinet of Ministers of Ukraine approved conditions for privatizing a 99.57% stake in the Odessa Portside Plant. The auction’s starting price was set at USD 594 mln (up from the USD 495 mln previously planned earlier). The tender terms will be officially published on February 6 and the auction will take place 75 days later. State Property Fund’s Vice-Chairman Dmitriy Parfenenko said that the plant will be sold together with the transshipment complex. In 2006 the plant posted net revenues of USD 372 mln, EBITDA of USD 95 mln (25.5% margin) and net income of USD 46.9 mln (12.6% margin). In November 2007 0.43% of shares were sold among the company’s management and staff. Vladimir Nesterenko: Previously, eight companies declared interest in participating in the privatization tender: Chernigiv Khimvolokno (CHIM: BUY), Azot Cherkasy (AZOT: N/R), Dniproazot (DNAZ: SELL), Acron (Russia), Eurochem (Russia), Renova (Ukraine), Sibur Holding (Russia) and Yara International ASA (Norway).We believe that Dmitry Firtash’s DF Group or Russian Togliatti Azot will also show interest. We estimate the company’s fair value to be in the range of USD 500-700 mln, however the price may surge to USD 800-1000 mln during the auction.