VS Energy May Loose Odessaoblenergo

The Supreme Court canceled a decision from 2000 by the Ukrainian Higher Economic Court about the legitimacy of the privatization of  a 35% stake in Odessaoblenergo (ODEN) by the Cyprian company Overcon Enterprises (related to the  VS Energy corporation of Russian businessman Alexander Babakov) in 1998. The key reason for the Supreme Court’s decision seems to be that Overcon offered about USD 1.6 mln less than its competitor, Foster Group. Now the state can take this 35% stake in ODEN and combine it with its own stake giving it 60% of the company. Alexander Paraschiy: The court’s decision came in response to VS Energy’s effort to dilute the state’s stake in ODEN via an additional shares issue. Now VS Energy might end up with only a 20.65% stake in ODEN and to completely loose control of the company. On the whole this is bad for ODEN, as VS Energy’s plans to reconstruct the company’s assets and to construct two 250 MW power stations in Odessa region are likely to be stalled.