Daily monitor

According to Interfax, S. Corean POSCO will not anticipate in tender of acquisition of the fourth biggest steelmaker of Ukraine, Zaporizhstal [ZPST UK]. The rationale behind the decision is that the company needs heavy capital spending to bring its operational base up to date. POSCO also notes that there are not enough raw materials to secure stable work of Zaporizhstal.

According to Interfax, an unnamed Russian metallurgical concern has bought 100% of the shares in Illich Stal, which controls Mariupol Illich ISW. The company’s management denies the acquisition and has referred to the deal as being a provocation and merely an attack by raiders.

Ukrainian Prime Minister Azarov reported that his government intends to issue UAH 20 bln in VAT bonds in the coming months. Mr. Azarov said that the government intends to issue UAH 20 bln worth of these bonds per saltum bonds at 5.5% interest and a five-year period of circulation.

State Property Fund’s officials announced yesterday that the Fund might privatize one of the four state-owned, fossil-fuelled generating companies [CEEN UK, DNEN UK, DOEN UK and ZAEN UK] by the end of 2010. However, massive privatisation of electricity-sector companies is more likely in 2011, the SPF notes. Regarding the privatisation of 25% stakes in four power-distributing companies, the SPF may decide to break up the shares sold on the stock exchange into smaller blocks so that the market can absorb them.

Myronivsky Hliboproduct [MHPC LI, HOLD], a major Ukrainian poultry producer, has started construction of its new poultry facility in the Vinnytsia region. The company plans to launch Phase 1 by mid-2013, with Phases 1 and 2 to reach their full capacity of 100 thsd tonnes per annum each by 2015. This facility should increase MHPC’s total poultry production by 60%. The total CapEx into the project is estimated by the management to be USD 670–700 mln. The construction of Phases 3 and 4 will depend on future market conditions and resources’ availability.

Ukrnafta [UNAF UK] increased starting price for its oil to UAH 5680 per tonne (USD 98 per bbl) at May 26 oil auction. In the earlier auctions, UNAF sold its oil at UAH 3000-3500 per tonne (USD 52-60 per bbl) price. The company has also changed terms of shipment. Whereas earlier UNAF sold its oil ExWork, this time the sold oil is to be shipped to pipelines and railway stations.