Government Approves Privatization of Blocking Stakes In Six Oblenergos.

According to a government decree from April 26, 2007, blocking stakes in six electricity distribution companies are to be privatized in 2007:

Prykarpatoblenergo (PREN) – 25.02%

Lvivoblenergo (LVON) – 26.98%

Odesaoblenergo (ODEN) – 25.01%

Poltavaoblenergo (POON) – 25% + 1 share

Chernihivoblenergo (CHEON) – 25% + 1 share

Sumyoblenergo (SOEN) – 25% + 1 share

The decree also stipulates that the listed stakes be privatized only after approval of the conception of privatization of electricity sector companies. The conception is scheduled to be approved in May.

Alexander Paraschiy: The government’s vision of Oblenergo privatization differs from the vision of the State Property Fund (SPF): the latter proposed another list for 2007 privatization which includes ten Oblenergos; and only two Oblenergos fell into both the Cabinet’s and the SPF’s (refer to our April 19 news) lists. The government seems to support the Ministry of Fuel and Energy which proposed selling only the remaining blocking stakes in Oblenergos, while not selling 5%-15% of those Oblenergos where the state has 65%-75%. We also see more logic in only blocking stakes – the state is most likely to gain more from their privatization due to heated competition between potential buyers. We are waiting on the privatization conception document to get a full view of the Cabinet’s final plans for Oblenergo privatization.