It took about 20 minutes for the State Property Fund to sell a majority stake in one of the nation's top energy generating companies to an obscure firm founded just two months ago. The 60.773 percent of Donbasenergo was auctioned off on Aug. 21 for Hr 718.92 million – less than 15 percent over the starting price.
The
sale of Donbasenergo has been the biggest privatization auction this
year. But the auction itself, broadcast over the Internet, looked
lackluster, with government officials casually flipping through the
proposals of two companies that offered bids.
The
auction fueled speculation that the outcome of the sale was
per-determined in favor of a brand-new Donetsk-based company
Energoinvest Holding. Energy expert Dmytro Marunich says it’s not
even clear if the new owner can fulfill all the privatization
conditions. However, he believes that some guarantees must have been
provided to the State Property Fund by the company’s secretive
founders.
The
state Property Fund has failed to provide any information about the company’s assets, however, but has denied accusations of insider
deals.
Donbasenergo
is one of the nation’s top six energy generators, according to a 2012
report by DTEK, the nation’s biggest energy holding that belongs to
Rinat Akhmetov, Ukraine’s richest man.
Donbasenergo
owns Starobeshivska and Slovyanska thermoelectric power stations in
Donetsk region, which provide energy for heavy industry there. It
produces 4.6 percent of the nation’s electric energy, according to
company’s web-site. In 2012 it posted Hr 5.57 billion in revenues and
a net profit of Hr 30.98 million.
But
the company needs investment badly as its assets are worn by 70 to 90
percent, according to the company’s own estimates. At the same time,
the government needed cash to cover the budget deficit and inch
closer to its privatization revenue target of Hr
10.9 billion. During the first seven months it only came up with 1.67
percent of the annual revenues.
The
government also hopes to solve other problems of the energy industry
through the sale of Donbasenergo.
“This
company (Donbasenergo) really needs investments. (But) privatization
also has to solve the issue of Ukrainian coal sales. That’s our
principle — the company should go to someone who is in the field of
coal mining here in Ukraine. It is necessary to provide jobs and
wages to Ukrainian miners,” Oleksandr Ryabchenko, head of SPF, said
earlier this year.
When
setting up the auction, the State Property Fund said that the
successful bidder was required to have produced in the past three
years volumes of electricity equal to at least 15 percent of
Donbasenergo’s output in the same period.
Alternatively,
the company should have produced in Ukraine at least 15 percent of
Donbasenergo’s coal consumption in the past three years. It should
also own enough coal to be able to supply Donbasenergo for the next
five years.
But
it’s not clear if the auction winner, Energoinvest Holding, actually
meets the terms.
Energoinvest
Holding was registered just two months ago, on June 20, in Donetsk.
The company was founded by Krasnolymasnka LLC that in mid-2012 was
owned by businessman and ex-lawmaker from Party of Regions Ihor Humeniuk and three other people, including
energy minister’s advisor Serhiy Kuzyara.
Forbes Ukraine
previously suggested that Kuzyara has ties with Viktor Yanukovych’s
elder son Oleksandr.
In
June, Krasnolymasnka LLC was taken over by a new individual,
according to an Antimonopoly Committee statement at the time. The
identity of this individual was not revealed.
Its
daughter company, Energoinvest Holding, also changed hands right
before the auction, on Aug. 8. It currently belongs to a
Netherlands-based Energoinvest Holding B.V. It’s not clear what
assets – if any – the company owns. The State Property Fund does not provide this information to press.
Energoinvest
Holding’s rival, TekhNova, has more of a track record in Ukraine’s
energy sector. It rents a number of generation facilities in
Cherkasy, Chernihiv and Sumy. However, as of 2012, its owners were
hiding behind offshore entities in Cyprus and the British Virgin
Islands, according to Nashi Groshi, a public procurement watchdog.
Ukraine’s
media and the expert community have reported that this company is at
least partly owned by ex-lawmaker from Nasha Ukraina party Anatoliy
Shkriblyak, who is TekhNova’s deputy director. He has not commented
on the ownership issue.
According
to the conditions of the sale, the new owner of Donbasenergo has to
make sure that 70 percent of coal supplies used by Donbasenergo come
from Ukrainian mines. There are also a number of investment and
social commitments, such as saving the jobs for all of 6,164
employees.
Marunich
says that the new owner is unlikely to hold the new asset for a long
time, and will probably resell it in the same way Ukrtelecom, a state
telecoms monopoly, was resold two months ago after its privatization
in 2010. “I think, it may be
an issue of resale, but it is also unclear to whom, as major players
in the market for various reasons refrained (from taking part in the
auction),” Marunich says.
Ukraine’s
State Property Fund has a history of selling energy companies with
little or no competition, and with a minimal increase over the
original bidding price. For example, at the
beginning of 2012 a 25 percent stake of Dniproenergo, another
energy generator, was sold to DTEK for Hr 1.17
billion, or just Hr 6 million over the opening price.
In late 2011, a 25
percent stake of Kyivenergo was bought by
DTEK for Hr 450.5 million, comparing to the opening price of Hr 432.3
million. At the moment DTEK owns 72.39 percent of Kyivenergo and 72.9
percent of Dniproenergo, as well as some other energy generating
companies.
Kyiv Post staff writer Kateryna Kapliuk can be reached at [email protected].
