Cabinet sets starting prices for Zakhidenergo, Kyivenergo at premium to market

Yesterday the Cabinet of Ministers approved the privatization conditions and starting prices for a 45.1% stake in Zakhidenergo (UX: ZAEN UK, BUY) at UAH 335 per share and a 25% stake in Kyivenergo (UX: KIEN UK, N/R) at UAH 16 per share, Interfax reported yesterday. The starting price for Zakhidenergo represents a 67% premium to yesterday’s close, while Kyivenergo’s price a 128% premium to yesterday’s offer. Following yesterday’s decision, the State Property Fund should publish an official announcement in its weekly newspaper, which is published on Wednesdays. The auction itself should take place 75 days after publication, which implies a December privatization date. Yegor Samusenko: We believe privatization, especially at a premium to the current market, will be a catalyst for the entire sector.  We still see DTEK as the most likely and only bidder for both stakes, it is the only candidate that would be able to gain control over the companies via privatization of the stakes. Please look for a flash note later this morning.