OREANDA-NEWS. September 29, 2014. DTEK has completed the establishment of its governance system, which started in 2011. Setting up a strategic holding and operating companies is aimed at improving business sustainability by building a transparent and efficient corporate governance system.

DTEK started reorganising its governance structure in 2011. The project was designed for three years and was intended to enhance governance efficiency. At the first stage, the company dissolved local headquarters and made the Corporate Centre as close as possible to the operating companies, which enabled faster decision-making, implemented common standards, streamlined and unified key business processes.

In 2013, DTEK proceeded with the second stage of reorganisation designed to separate the functions of strategic planning and operational management. This will enable efficient development of new businesses of hydrocarbon production and wind power generation along with the coal production and electricity generation and transmission. On the basis of the existing business entities, we established a strategic holding company — DTEK B.V. — and three operating companies managing conventional energy (DTEK Energy with the holding company DTEK ENERGY B.V.), alternative energy (DTEK Renewables with the holding company DTEK RENEWABLES B.V.) and oil and gas production (DTEK OIL&GAS B.V.) assets.

The second stage of reorganisation did not involve operations changes and affected only the corporate centre office.

The strategic holding is a 100% owner of the three operating companies. This set-up allows the strategic holding to fully control all DTEK’s businesses and at the same time develop each area taking into account its peculiarities as the strategic holding focuses on long-term planning, consideration and development of new business areas. The strategic holding is also responsible for managing the portfolio of investments, long-term fundraising, developing managerial talents, reputation management and government relations. The strategic holding company is headed by Maxim Timchenko.

"DTEK’s expansion of its businesses required an essential review of our governance model," says DTEK CEO Maxim Timchenko. "Our companies are at different stages of maturity and have different organisational structures. Three operating companies shall ensure development in their business segment. Implemented changes will help efficiently allocate managers’ efforts both in terms of modernisation of companies, implementation of operational improvements and strategic planning. The new architecture will make the company more transparent and open for investors and partners. In view of the situation in the Donbas region DTEK created an anti-crisis centre. Its task is to ensure the operation of our production companies and to take care of the adjacent local communities. Until the situation stabilises the centre will be directly reporting to the strategic holding".

Key objective of the three operating companies is to improve operational efficiency and gain industry-specific expertise. At the same time, managers have become much more independent in making operational and administrative decisions.

DTEK ENERGY will focus on managing coal mining and processing, electricity generation and distribution, and service companies. Vsevolod Starukhin (former CFO of DTEK) was appointed as the CEO of DTEK Energy, and Dmytro Sakharuk (former Legal Support Director of DTEK and currently Head of the Anti-crisis Centre) was appointed as the COO.

DTEK Renewables will continue developing wind power projects and possibly setting up companies in other alternative energy sectors. DTEK Renewables will be headed by Guerman Ainbinder (currently, director of Wind Power LLC).

The holding’s largest asset in the oil and gas sector — Private Joint-Stock Company Naftohazvydobuvannya — headed by Igor Shchurov will continue the development of oil and gas projects.

DTEK started to work in the new format in September 2014.