Ukraine intends to keep 51% Turboatom stake in state hands

Ukrainian Prime Minister Volodymyr Groysman told parliament
on May 18 that the government does not intend to sell its controlling stake in
power turbine producer Turboatom (TATM UK) in which it controls  75.2% of
shares, Interfax-Ukraine reported. Groysman proposed for a 51% stake in the
company to remain in state hands, while a 20%-25% stake should be sold to an
“international partner with a global name and an excellent reputation” with the
aim of doubling the company’s headcount to 7,000 employees. He added that the
privatization process should “maximally take into account the opinion of the
company’s management.”

Alexander Paraschiy: This is a disappointing statement indicating that the Ukrainian
government is not ready to sell one of its most promising assets. In our view,
Turboatom may lose its competitive edge and lose a significant portion of its
customer base in a couple of years if it remains in state hands. Also, it was
strange to hear Groysman say that the company’s owner (the government) will
“maximally take into account” the position of its management in
making the decision to sell it. That could indicate that management, not the
government, is controlling the company. In any case, we do not expect its
privatization this year.