DTEK accumulates UAH 1.6 bln payables to state companies, media report
The total debt of DTEK Energy to state-controlled natural gas suppliers and electricity grid operators has reached UAH 1.6 bln as of March, the nashigroshi.org news site reported on Mar. 23, citing their data. Out of this amount, UAH 948 mln is debt for natural gas that was consumed by its Luhanska Power Plant. Recall, since August 2019, the plant has been unable to receive any coal and it had to shift its power unit to burning natural gas.
Responding to the report, DTEK commented that state company Energorynok (the former operator of the electricity wholesale market) owes DTEK-Skhidenergo (the nominal owner of the Luhanska plant) UAH 1.9 bln for supplied electricity. Energorynok's total debt due to DTEK Energy was UAH 7 bln as of end-June 2019, according to DTEK Energy’s semi-annual report.
Alexander Paraschiy: It seems like DTEK is trying to employ a tried-and-true tactic in its relations with state companies, which had proven effective with Kyivenergo in 2011-2012. In that case, DTEK did not pay for natural gas consumed by its related subsidiary Kyivenergo in order to raise its gas payables to the amount of Kyivenergo’s losses from inefficient prices for heat (set by Kyiv city). In a normal situation, the city would not be ready to pay the compensation for losses. But faced with the risk of failing to provide heat supply to the entire capital city (from a cut in gas supply to Kyivenergo), the city had no choice but to pay.
These days, the accumulated payables of DTEK-Skhidenergo for gas (and the risk of a gas cut) should stimulate the government to consider the unresolved problem of large Energorynok payables to DTEK-Skhidenergo and the entire DTEK Energy holding. If so, DTEK will enjoy a significant release of its working capital.