Kolomoyskiy backs Ukrnafta’s vertical integration plans

Ukrainian businessman Ihor Kolomoyskiy, co-owner of Privat Group, said yesterday that he favored the creation of a vertically integrated oil company (VIC) on the basis of Ukrnafta (UX: UNAF UK) and the Ukrtatnafta refinery, Interfax reported. Kolomoyskiy suggested the dissolution of both companies in order to create a new VIC, however he claimed there were no developments yet on the negotiations. The businessman estimated the value of Ukrnafta at USD 10 bln (vs. its current MCap of USD 5.7bln) and Ukrtatnafta at USD 2 bln. He did not disclose Privat’s targeted share in the future VIC. Privat Group owns ~45% of Ukrnafta shares. Antonina Davydenko: Kolomoyskiy’s statements could indicate Ukrnafta’s largest shareholders, Privat and the state (represented by Naftogaz which holds 50%+1) intend to contribute Ukrtatnafta to the VIC at USD 2 bln which is approx. 40% above our estimated value of the refinery, thus posing dilution risk for minority shareholders (We estimate the refinery’s value at USD 1.0-1.5 bln based on EV/Sales 2010).