Government Approves Privatization Of Several Oblenergos

According to the State Property Fund, the Cabinet approved a list of Oblenergos yesterday from which minority stakes can be privatized this year. All the companies listed in SPF’s plan except Cherkasyoblenergo (CHON) have been OKed for privatization. As before, the SPF plans to reduce its presence in Oblenergos to 60%; and it plans to completely privatize companies where the state owns less than 40% stake . The SPF’s list includes:

Vinnnitsaoblenergo (VIEN) – 15% stake

Chernivtsioblenergo (CHEN) – 10%

Zakarpatoblenergo (ZOEN) – 15%

Dniprooblenergo (DNON) – 15%

Donetskoblenergo (DOON) – 5%

Krymenergo (KREN) – 10%

Volynoblenergo (VOEN) – 15%

Lvivoblenergo (LVON) – 27%

Odessaoblenergo (ODEN) – 25%

Alexander Paraschiy: The SPF’s list looks strange – three companies where the state has more than 60% stakes are not there – Kharkivobelnergo (HAON, 65%); Mykolaivoblenergo (MYON, 70%) and Zaporizhiaoblenergo (ZAON, 60.24%). Inclusion of Lvivoblenergo into the list is another surprise – this company is one of five Oblenergos which have conflicting shareholders. It looks like SPF wants to sell one of these companies (i.e. LVON) to test the outcome. However, we believe this is a bad choice and it will only inflate the conflict. It would be more advisable to either exclude all “conflicting” companies, or put them all together.