Friday VIEN auction to test privatization push

Ukraine’s State Property Fund disclosed the three bidders that filed documents to privatize 50% in Vinnitsaoblenergo (VIEN UK) on February 3: Lvivoblenergo (LVON UK), controlled by Grigoriy Surkis; LEO, controlled by Energy Standard Group; and a subsidiary of VS Energy Group. The SPF also said it had three applicants apply to privatize 45% in Chernivtsioblenergo (CHEN UK) on February 7, but did not disclose their names. Energy Standard is considered an indirect holder of 20% in Vinnitsaoblenergo (with 75% currently in state hands), while VS Energy is the owner of a 22% stake in Chernivtsioblenergo (with 70% in state hands).

Alexander Paraschiy: We stick to our view that all the Oblenergos stakes being offered for privatization will be purchased by current minority shareholders (namely, the three bidders for Vinnitsaoblenergo and DTEK), without competition. So far, there have been three successful privatization auctions where DTEK was the expected buyer and experienced little competition. After a strange delay in the auction for 50% in Zakarpatoblenergo (ZOEN UK) last week, in which DTEK did not participate, Friday’s auction of the Vinnitsaoblenergo stake will be a real test of the government’s commitment to continuing with its electricity sector privatization plans.