Ukrnafta Eyeing Fertilizer Producers

According to a local Ukrainian daily, Ukrnafta’s (UNAF: SELL) supervisory board is considering the acquisition of a stake in one of Ukraine’s nitrogen fertilizer producers. According to the source, the major candidates are Odessa Portside Plant (which is scheduled to be privatized shortly), Dniproazot (controlled by Privat Group, which is also a 42% owner of Ukrnafta), and Rivneazot (said to be controlled by the co-owner of the only gas supplier to Ukraine, RosUkrEnergo, Dmitriy Firtash). Vladimir Nesterenko: We expect the final outcome to depend heavily on Privat’s ability to get the green light from the government. If approved, the ultimate effect of the acquisition on Ukrnafta’s value will depend on the price of the deal.