Chernihivoblenergo replaces supervisory board head at EGM

Chernihivoblenergo (UX: CHEON UK) shareholders convened for an EGM on January 11; the company had been unable to sit an EGM/AGM since 2001 due to shareholder conflicts. The EGM voted to replace the head of the supervisory board with Roman Zhugan. Yegor Samusenko: The EGM signals a line in Konstantin Grigorishyn’s attempts to change the Chernihivoblenergo management controlled by Grygoriy Surkis. In May 2009, the State Property Fund sold a 25% stake in the electricity distributor to a local Ukraine-based broker, which, according to media reports, was bought on behalf of Grigorishyn. Chernihivoblenergo had not posted a significant profit until 2008, when it earned UAH 39 mln (or UAH 0.33 per share). We expect all 2001-08 profits to be reinvested in the firm, with nothing paid as dividends due to the company’s low cash position (UAH 1.9 mln) and Grigorishyn’s likely desire to not share dividends with state.