Property Fund to sell CEEN, DOEN at

The State Property Fund of Ukraine is going to sell its 86% stake in Donbasenergo (DOEN) and 78% stake in Centerenergo (CEEN) next year, Fund head Oleksandr Ryabchenko told a Dec. 20 press conference. He estimated the total proceeds from the assets sale at UAH 2.3-2.5 bln. He also highlighted a plan to sell the state’s remaining stakes in six power distribution companies, including heavyweights Kharkivoblenergo (HAON) and Zaporizhiaoblenergo (ZAON) for a total consideration of UAH 1.5-2.0 bln.

Alexander Paraschiy: All the listed stakes were in the Fund’s tentative 2012 privatization plan and the SPF blamed political uncertainty related to October’s parliamentary elections as the main reason for the delay. The indicated proceeds from sale of Donbasenergo and Centerenergo are discouraging, as they suggest the SPF is benchmarking UX prices: the cumulative UX-implied value of the GenCos’ state stakes is UAH 2.2 bln. Both stocks are trading now at more than a 50% discount to international peers at any metric. This suggests policy makers aren’t going to arrange a transparent tender for the companies and will pursue a scenario similar to the privatization of Zakhidenergo and Dniproenergo stakes last year.