SPF names bidders for 25% of DNEN and 40% of DOON

Ukraine’s State Property Fund said DTEK (DTEKUA) and Luhansk Energy Union, an electricity distributor owned by Energy Standard Group, submitted bids to privatize 40% of Donetskoblenergo (DOON UK) and DTEK was the only bidder for 25% of Dniproenergo (DNEN UK). Both privatization auctions are scheduled for January 11.

Alexander Paraschiy: Both Dniproenergo and Donetskoblenergo are affiliated with DTEK, which we believe will win both privatization auctions. The auction for Dniproenergo resembles that of Zakhidenergo last month, where DTEK was also the only participant. In the event of one bidder, the SPF will have to conduct an independent appraisal of the offered stake, which implies the deal could be closed in mid-February. The auction for Donetskoblenergo, on the other hand, looks similar to that of Kyivenergo (KIEN UK) (see our news of Dec. 9 and 12), when a company affiliated with Energy Standard Group also applied to participate. The latter’s role seems like a ploy to facilitate DTEK’s acquisition of Donetskoblenergo at the bid price, bypassing the long valuation procedures required for one-bid tenders.