DTEK Trading to supply Zakhidenergo with 1 mln mt of coal

DTEK Trading won a tender to supply 1 mln mt of coal to Zakhidenergo (UX: ZAEN UK, HOLD) in 4Q11-1Q12 at UAH 1,100 per mt ex. VAT, according to the government tenders portal. Antonina Davydenko: We deem the contract price to be above the market price given that in August Zakhidenergo’s peer Centrenergo procured 1.5 mln mt coal for 2H11 at only UAH 803 per mt ex. VAT, 27% cheaper than DTEK Trading’s contract. We estimate the contracted amount to be approximately 15% of Zakhidenergo’s annual coal consumption. DTEK has had operational control over Zakhidenergo since late 2010.