Tymoshenko ready to issue state guarantee for Turboatom

Prime Minister Yulia Tymoshenko said at a press conference on Saturday that the government was ready to provide a state guarantee to Turboatom (TATM) for a USD 100 mln loan for modernization, according to Interfax this morning. Yegor Samusenko: The proposed credit line would most likely be used to create a production cycle for nuclear reactor vessels. While this business is critical due to the planned modernization of ~15 nuclear blocks just in Ukraine, there are two negative implications for minority shareholders. First, the new CapEx might require additional financing from internal sources, which would most likely mean not paying dividends for 2009. Second, involvement in the production of nuclear reactor vessels could lead to higher strategic importance for the plant to the state, which would decrease the chances of Turboatom’s privatization in the near future.