Ukraine continues to form state holding co to manage corporate rights at regional power cos

MOSCOW. Aug 1 (Interfax) - Ukraine's Energy Ministry has decided to transfer state stakes in another six regional power companies to the specially created state company Ukrainian Distribution Networks (UDN), Ukrainian media reported, citing a company statement.

This includes 65.0001% of Kharkovoblenergo, 60.2475% of Zaporozhyeoblenergo, 50.999% of Ternopoloblenergo, 25% of Sumyoblenergo, 46% of Cherkassyoblenergo and 99.66% of Ukrainian Energy Conservation Service Company.

The main goal of transferring state stakes to UDN is to support and strengthen the positions of distribution system operators on the energy market, the press release said.

Under an Energy Ministry decree dated July 28, the new company is increasing its charter capital to UAH4.76 billion with a new share issue of UAH3.22 billion with which the ministry will pay for the stakes in the regional companies. The market value of the shares was determined according to the requirements of Ukraine's law on joint-stock companies.

The decision to transfer the stakes to UDN is a "strategic step to ensure the financial stability and expand possibilities for the development of distribution system operators," UDN acting CEO Mikhail Ilnitsky said.

"There are no grounds for concern regarding a negative influence on the activities of the distribution system operating companies. Nothing will change in the work of operational personnel," he said.

UDN was created by a government resolution dated November 29, 2022 to manage the corporate rights of the state at the regional power companies. UDN's initial charter capital of UAH1.514 billion was formed with the contribution of 70% stakes in Khmelnitskoblenergo (UAH847.782 million) and Nikolayevoblenergo (UAH666.288 million).

The Cabinet said at the time that the new company's charter capital could be increased in future with the contribution of shares in other regional power companies from the state sector. The Ukrainian president's deputy chief of staff, Rostislav Shurma said this summer that the state holding company would also get stakes in regional power companies from VS Energy Group once the process of seizing the confiscated shares is completed.

The official exchange rate was UAH36.57/$1 on July 31.