12 December 2011
The State Property Fund announced on Friday the starting prices for 50% of Vinnytsyaoblenergo (VIEN UK) at UAH 168 mln (or UAH 108.3/share vs. the last equity deal at UAH 11.0/share) and the starting price for 45% of Chernivtsioblenergo (CHEN UK) at UAH 65 mln (or UAH 2.5/share vs. the last deal at UAH 1.6/share). The privatization date has not yet been announced, but could be named this Wednesday. Alexander Paraschiy: The near-controlling stake in Vinnytsiaoblenergo might be of interest to all local energy market players as it would open the door for operating control over the company even for an outsider. We therefore would not be surprised to see the privatization contested by Energy Standard, DTEK, AES and VS Energy. Obtaining control of Chernivstioblenergo following privatization of this stake would be an easy task for VS Energy, which already holds 21.98% and hard for other potential bidders that would have to accumulate 5% of 9% official free float. Thus, we see VS Energy as the most logical bidder for Chernivstioblenergo. As shares in both Oblenergos are illiquid, we expect limited reaction from the market to the privatization news.