President Yanukovych does not exclude IPO for Naftogaz of Ukraine

President Viktor Yanukovych said yesterday the sale of a stake in state owned Naftogaz was possible via an IPO on a western stock exchange, according to a speech at an energy strategy meeting, according to Interfax. Yanukovych said that the transaction could be called for in order to improve Naftogaz’ financial situation, fund its investment projects and create an efficient and transparent company. Antonina Davydenko: Though talk of an IPO for Naftogaz have been floating for some time, and the company’s head, Evhen Bakulin, speculated about a listing date in 2012, we view this as highly unlikely. There are legal issues related a direct listing by Naftogaz on a foreign stock exchange and the ban on privatization of the gas transportation system. Moreover, the company is involved in cross subsidization schemes and quite non-transparent. In 2010, Naftogaz generated a net loss of UAH 21.43 bln versus a profit of UAH 1.26 bln in 2009.