Ukrnafta split between Naftogaz, Kolomoisky has not been agreed, Zelensky states

The question of separation of Ukrnafta (UNAF UK)
assets between state-controlled Naftogaz (NAFTO) and companies controlled by
tycoon Ihor Kolomoisky has not been yet agreed upon, president Volodymyr
Zelensky stated at his press marathon on Nov. 26.

At the extraordinary general meeting of Ukrnafta,
scheduled for Nov. 30, shareholders are offered to vote for many resolutions
that might finalize the company’s split between Naftogaz (owning a 50%+1 share
in the company) and three companies controlled by Kolomoisky (controlling
aggregately 40.1% shares).

In particular, based on the original agenda of the
EGM, Naftogaz can be granted the right to exchange its 50%+1 stake in the
company for 100% in the company UkrGazAktyv (to which Ukrnafta will pass some
of its assets). This is planned to be happen in the following stages: 1)
Ukrnafta will pass some of its assets to UkrGazAktyv, its fully-owned newly
created company, 2) Ukrnafta will sell its 100% stake in UkrGazAktyv to
Naftogaz, 3) Ukrnafta will purchase 50%+1 of its shares from Naftogaz and later
will cancel these treasury shares.

Also, based on the augmented EGM agenda Kolomoisky and
partners can be granted the right to exchange their 40.1% stake in Ukrnafta
into 100% in the company Nafta-Aktyv (to which Ukrnafta will pass some of its
assets). This is planned to be happen in the following stages: 1) Ukrnafta will
pass some of its assets to Nafta-Aktyv, its fully-owned newly created company,
2) Ukrnafta will sell its 100% stake in Nafta-Aktyv to three companies related
to Kolomoisky, 3) Ukrnafta will purchase 40.1% of its shares from the three
companies related to Kolomoisky and later will cancel these treasury shares.

According to a Nov. 23 report from zn.ua newspaper,
one of the separation plans assume Naftogaz will receive the part of Ukrnafta
that produced 74% of the company’s natural gas and 38% of its oil in 2020.
Kolomoisky will receive the other part of the company. The source does not
specify what could happen to other assets of Ukrnafta, e.g. its downstream business.

Alexander Paraschiy: If all the
EGM items are approved, Naftogaz will have no stake in Ukrnafta, but instead
will own some Ukrnafta assets that will be passed to UkrGazAktyv. Kolomoisky,
in his turn, will possess another part of Ukrnafta assets which will be passed
to Nafta-Aktyv. However, it looks like Nafta-Aktyv is the new name of the
company initially created under the name UkrGazAktyv. This means the initial
scenario (sell part of Ukrnafta to Naftogaz in exchange of its 50% stake in
Ukrnafta) has been changed to an alternative (sell part of Ukrnafta to
Kolomoisky in exchange of his 40% stake in Ukrnafta), under which Naftogaz will
remain controlling shareholder of Ukrnafta.

All this mess with draft EGM resolutions only confirms
Zelensky’s recent statement that the way Ukrnafta will be separated between two
large rival shareholders has not been agreed upon.

Anyway, the Nov. 30 EGM offers minority shareholders
an opportunity to exit from Ukrnafta shares. To make this happen, shareholders
have to register for the EGM and vote against at least one EGM item that
includes a “significant deal.” If they vote against, by law, they will be
eligible to demand that Ukrnafta buy back their shares at the market price – we
expect such price would be close to UAH 272 per share.