Rada Bans Privatization Of Ukrnafta Until 2008

The Verkhovna Rada has imposed a moratorium on the privatization of the state’s 50%+1 share in Ukrnafta until 2008. In early October, the parliament banned the privatization of Ukrnafta, but in late October President Yushchenko vetoed the document. The Verkhovna Rada tried to override the veto, but failed and sent a new version of the law to the President in December, 2005. However, on January 5, 2006, the President again vetoed it. Concorde Capital: It is important to note that Privat Group, which holds 43% stake in Ukrnafta, has said nothing. This silence may mean that either the Group wants to maintain the status-quo and would prefer that the 50%+1 stake not change hands, or they hope the President will continue his tradition of vetoing this law. The latter would imply that Ukrnafta may be privatized this year, which would appear to be more appealing for Privat Group. Notwithstanding though, we do not believe that the buyout of Ukrnafta will happen in 2006 due to political instability.