Oblenergo EGM Results: NC ECU Continues To Strengthen Its Positions

Five Oblenergos EGMs out of the nine scheduled for November-December were held recently. As was the case at power generation company EGMs, the meetings led to the replacement of the supervisory boards, with all boards being stacked with shareholders from the National Energy Company (NC ECU) or minorities. The NC ECU took seven positions out of seven in Vinnitsaoblenergo (VIEN), Zaporizhiaoblenergo (ZAON) and Dniprooblenergo (DNON). In Donetskoblenergo (DOON), out of seven positions, only five were taken by the NC ECU, the other two went to smaller shareholders: the Donetsk-based company Gorenergo (6.96% of shares) and an offshore company, Omni (17.62%). In Cherkassyoblenergo (CHON) only three out of six positions were occupied by the NC ECU (which only owns a 46% stake). The other two positions went to state company, UkrEsCo (25%), and one position was occupied by the offshore company Grayham (15%). Alexander Paraschiy: Among the five companies listed above, only CHON managed to elect a supervisory board that fairly represents the interests of all shareholders. Supervisory boards at the other four companies contain either NC ECU people, half of which are related to SCM, or SCM affiliates (like Gorenergo in DOON). The four other EGMs are scheduled to take place over the next two weeks: Mykolaivoblenergo (MYON), Volynoblenergo (VOEN), Kharkivoblenergo (HAON) and Chernivtsioblenergo (CHEN). The outcome of HAON and VOEN’s EGMs look the most predictable, the NC ECU is likely to occupy all places in the boards. The most interesting board election will be at MYON and CHEN, where the NC ECU has a 70% stake and VS Energy has about a 23% stake and no representation on the board. If VS Energy representatives are elected to the boards (which looks quite likely), this will signal the warming of the relationship between this business group and state.