Sold! Oblenergos fetch $100 million
By Vitaly Sych, Kyiv Post Staff Writer
AES Washington Holding B.V., a U.S. firm, and Slovakia's Vychodoslovenske Energeticke Zavody (VEZ) purchased the first three of Ukraine's electricity distribution companies to be put on the auction block. The country will receive a total of $100 million for the three companies.
AES won the tender for the Kyivoblenergo and Rivneoblenergo electricity distributors (oblenergos), while Slovakia's VEZ acquired the regional power supplier that serves the central Ukrainian city of Zhytomyr.
AES paid Hr 248.6 million for its 75 percent stake in Kyivoblenergo, edging out Electricite de France's Hr 208 million bid. The stake's starting price was set by the State Property Fund (SPF) at Hr 174.3 million.
AES turned out to be the sole bidder for a 75 percent stake in Rivneoblenergo, offering Hr 125.2 million for the company. AES' bid represented a 25 percent premium over the minimum price of Hr 100.6 million set by the SPF. SPF head Oleksandr Bondar said that because there was only one bidder, the fund would conduct a "technical re-evaluation" of the competition. That evaluation is an administrative control that will not affect the outcome, however.
VEZ, one of Slovakia's three electricity distribution companies, won the tender for a 75.56 percent stake in Zhytomyroblenergo with a bid of Hr 190 million, topping AES' Hr 148.4 million bid for the stake. The starting price for the stake was Hr 95.1 million.
Bondar admitted that fund officials had expected higher offers and more bidders. He said Ukraine's current political turmoil had dampened investors' enthusiasm for the companies.
Mikhail Malyovany, head of AES' Ukrainian representative office, said his company will keep its commitment, despite Ukraine's unpredictable political climate, which includes a possible government turnover if parliament deputies take a vote of 'no confidence' in Prime Minister Viktor Yushchenko.
"Political risks were factored into the price we offered," Malyovany said.
He said AES hasn't decided how much it will ultimately invest in its two acquisitions, but should make a determination within three months, after studying the companies more closely.
AES also has electricity generation and distribution capacities in Kazakhstan and Georgia.
The tender proved more successful than the government's earlier attempts to privatize oblenergos. In 1998, the government offered stakes in several oblenergos, but failed to generate any interest among foreign investors.
Matty Ven Gerik, managing director at Credit Suisse First Boston, the firm that advised SPF in the tender, said he was generally content with the tender results.
"It was difficult because of the political and economic situation in the region," Ven Gerik said. "But the results speak for themselves. For the first time, Ukraine has a number of foreign companies competing for its energy assets."
In a similar tender scheduled for April 24, Ukraine will sell majority stakes in Khersonoblenergo, Kirovohradoblenergo and Sevastopoloblenergo. |
