Crimean authorities confiscate Krymenergo from DTEK, Ukraine

Crimean authorities confiscate Krymenergo from DTEK, Ukraine



22 січня 2015 года
Конкорд Капитал

The local council of Crimea, which is Ukrainian territory occupied by Russia, adopted a resolution to nationalize the regional power distribution company Krymenergo (KERN UK), Interfax reported on Jan. 21. “The utility sector should be under state control," the council’s head explained. He also blamed the company for “extortion of money from various companies under various pretexts”, according to Interfax.



Krymenergo is a part of integrated power holding DTEK (DTEKUA), which owns 57% of its shares. The Ukrainian government, via its holding company NAK ECU, holds a 25% stake in Krymenergo. “The nationalization has become a surprise for DTEK, as there were no grounds for such a move. We have not received any court decisions describing the violations that could have led to such events,” said DTEK’s press service, as reported by Interfax. The holding has yet to study the issue and offer an official response, according to Interfax.



Alexander Paraschiy: The event is a huge political loss for Rinat Akhmetov, DTEK’s owner, who has tried to remain neutral throughout the conflict between Russia and Ukraine. However, we believe this is not a loss for DTEK as Krymenergo is not its best-performing company. In 2013, Krymenergo generated UAH 2.6 bln in revenue (2.9% of DTEK’s consolidated), UAH 0.2 bln in EBITDA (1.3% of DTEK’s consolidated) and a negative bottom line. Much more important are DTEK’s assets located in the occupied territory of the Donestk and Luhansk regions, so currently, the core risks for DTEK’s fundamentals come from the war in Donbas.



The decision on nationalization is indeed a big surprise, though we see a high likelihood that Akhmetov will be able to resolve the issue with the people in charge in Crimea.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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