OREANDA-NEWS. December 27, 2007. The additional issue of shares by Dneproenergo OJSC may turn into a large-scale corporate conflict between two largest financial and industrial groups of Ukraine – System Capital Management, controlled by Rinat Akhmetov, and Privat group, controlled by Igor Kolomoiskiy and Gennadiy Bogolubov as well as their junior partners.

On December 21, Zaporozhie region economic court of appeal ruled void the decision of the general shareholders' meeting, held August 27, 2007, on the statutory capital increase by 52.1%, or by UAH 51.8585 mln to UAH 149.1858 mln via additional share issue, UFC-Capital reports. In addition, the court ruled void the decision of the shareholders’ meeting on changing the governing bodies: supervisory board and auditing committtee, as well as on adoption of a new wording of the statute. The court made this decision after consideration of the claim filed by the minority shareholder – the Dnepropetrovsk-based Business-Invest LLC, which owns 257 shares (0.00655%) of the company. For a long time Business-Invest is the structure close to the co-owners of PrivatBank – Igor Kolomoiskiy and Gennadiy Bogolubov, and it became famous for its participation in corporate conflicts around Interregional Fund Union OJSC and Dneprospetsstoy OJSC.

The Dneproenergo bankruptcy case was initiated in December 2001. Zaporozhie region economic court in September 2003 adopted the creditors register consisting of 65 companies and organizations. The total amount of claims confirmed by the court was UAH 1.39 bln. The creditors committee in November 2003, initiated the reorganization of the company. Zaporozhie region economic court in May 2005, approved the company reorganization plan agreed with the key shareholder of the company – Energy Company of Ukraine NJSC.

In January 2007, the creditors committee studied all submitted proposals and approved as investors Pavlogradugol and Komsomolets Donbassa Mine (companies of Donbass Fuel and Energy company (DTEK, Donetsk)), as well as instructed them to develop and agree amendments to the reorganization plan, approved by Zaporozhie region economic court in May 2005. The shareholders’ meeting as part of the reorganization plan implementation on August 27, 2007, decided to increase the statutory capital by 52.1% — to UAH 149.186 mn by additional issue previously agreed by the government, which shares will obtain Pavlogradugol and Komsomolets Donbassa Mine. In its turn, they will transfer to the company their rights to Investitsionnoe obschestvo LLC and cash in an amount of UAH 1.052 bn.

After additional issue completion and attachment of Investitsionnoe obschestvo LLC, DTEK and DTEK Holdings Ltd will control about 44.28% stake in Dneproenergo, and the share of Energy Company of Ukraine will shrink from 76.04% to 50%+1 share. The claimant considered illegal the shareholders’ meeting of Dneproenergo, held on August 27, as at that time the company was in the process of reorganization and the powers of the general meeting were suspended. Besides, Business-Invest draw the attention of the court to the fact that the ruling of Zaporozhie region economic court dated June 26, related to approval of the amended reorganization plan of the company, by which the shareholders’ meeting and the additional share issue were initiated, was challenged and at the moment of the meeting did not become effective. According to the claimant, the decision taken by the meeting on attachment of Investitsionnoe obschestvo LLC also contradicted to the law On state privatization program and that the consent given by the government was not enough for the aforesaid. Business-Invest also challenged the adoption of the new wording of the statute, as the agenda provided only for changes to some of its articles. It is interesting that Business-Invest challenged the additional issue in Zaporozhie region economic court, but at that time the court waived the claim filed by the investment company.

Dneproenero believes that the ruling of Zaporozhie region's economic court of appeal was carried out in violation of the substantive law and is ready to challenge this ruling in the court of review. Taking into account the fact that Yulia Timoshenko has come to power, who during the election campaign promised to put to rights at Dneproenergo and Luganskteplovoz, the chances of DTEK, a fuel and energy division of Rinat Akhmentov, to preserve control over this generating asset are practically equal to zero.

Dneproenergo OJSC is one of the largest thermal power generating companies of Ukrain, it owns and operates Pridneprovskaya, Krivorozhskaya and Zaporozhskaya thermal power stations (25 power units with output capacity ranging from 150 MW to 800 MW) with the aggregate installed capacity of 8185 MW.