Dniproenergo AGM Approves Restructuring

At their AGM yesterday, Dniproenergo’s (DNEN: HOLD) shareholders voted to restructure the company via an additional share issue and exchange of all the new shares for 100% in Investment Company Ltd. Investment Company has USD 208 mln cash on its balance sheet, which after restructuring will be on DNEN’s balance sheet. Those shareholders who did not vote for restructuring or participate in the AGM are eligible to sell their shares to Dniproenergo at USD 315.2 per share, the deadline for applications is September 27. According to the head of Dniproenergo’s financial recovery board, DTEK also is going to invest an additional USD 200 mln over the next five years on Dniproenergo’s CapEx, and an agreement on this investment has to be approved by the board of Dniproenergo’s creditors. Alexander Paraschiy: As we expected, the AGM approved restructuring. We do not believe any law suits brought against the AGM’s decisions will be successful, as everything was in line with Ukrainian legislation. As a result, the owner of Investment Company, DTEK, will increase its stake in DNEN from 8.3% to 39.7%. Stakes of other shareholders (including the state) will decrease by 1.52 times. Refer to our June 22 note for more details.