DTEK to support Dniproenergo through technical bond issues

Dniproenergo’s (DNEN: BUY) Acting CEO Serhiy Bedin said that DTEK plans to issue five series of local bonds for UAH 202 mln each (USD 41.6 mln) over the next five years (by 2013). The tenor of each series is 30 years; coupon is 0.001%. Several DTEK-related companies, Komsomolets Donbasa (SHKD: SELL) and Pavlohrad Coal will buy out the bond issues, according to Bedin. Proceeds in the amount of UAH 1.1 bln (USD 226.8 mln) will be spent to redeem Dniproenergo’s credit line granted by Oshchadbank to fulfill Dniproenergo’s investment programs. Alexander Paraschiy: Bedin’s announcement is in line with DTEK’s agreement with the state to fulfil all its investment commitments for Dniproenergo (see our news comment from yesterday). According to Bedin, this scheme will allow Dniproenergo to avoid taxes on proceeds.