State to vote for 30% dividends payout ratio at state-controlled enterprises

Ukraine’s Cabinet of Ministers prescribed state-controlled enterprises to pay 30% of their 2010 net income in dividends, according to a decree issued on January 5. The State Property Fund and a number of ministries that govern the state’s stakes are obliged to initiate AGMs during 1H11 and vote for dividend distribution in the amount of 30% of net income earned in 2010. In 2010, all state-controlled companies that earned positive net income for 2009 paid the same 30% in dividends. Yegor Samusenko: Among state-controlled listed enterprises, we expect this decree to affect four state-controlled electricity generation companies, 14 electricity distribution companies and machinery producer Turboatom (UX: TATM UK), which would result in 0-6% dividend yields at current prices. We do not expect Ukrnafta, where the state owns 50% stake, to adhere to the order, given that the company is de facto controlled by Privat Group (42% stake), which can block AGMs.