DTEK Announces Asset Development Plans, Eyeing Acquisitions

According to Maxim Timchenko, General Director of the Donbass Fuel and Energy Company (DTEK), the energy division of SCM business group, plans to invest USD 1.2 bln to upgrade its existing assets by 2012.  From this amount, USD 700 mln is to be invested in the coal segment, and USD 380 mln in upgrading the company’s electricity production capacities. The company will use its own capital and debt, no IPO plans are considered in the mid-term. DTEK also explicitly declared its plans to acquire new energy assets. Alexander Paraschiy: Investments will allow DTEK to increase efficiency of coal mining and power production.We believe that about USD 100 mln will be invested in DTEK’s power distribution networks. In DTEK’s expansion strategy, power generation companies look like the most likely acquisition targets. In particular, Donbassenergo (DOEN: BUY) looks like the number one target; along with energy distribution companies located in the eastern regions.