The introduction of martial law in Ukraine will not affect a privatisation tender for the state-owned 78.289% stake in the nation's leading power generating company Centrenergo scheduled for December 13, according to head of the State Property Fund (SPF) Vitaliy Trubarov .

According to him, bids are currently being received for the tender, after which the bidding companies must pay a guarantee fee. "And only after that we can talk about the number of bidders in the tender and their names," Trubarov wrote on his Facebook page on November 27.

"The introduction of martial law will not affect the privatisation processes (procedure), both for large and small enterprises. At the same time, an investor will take into account the relevant fact," he added.

Earlier, the Ukrainian cabinet approved a starting price for the sale of the 78.3% stake in Centrenergo of UAH5.98bn ($210mn).

In a separate resolution, the Ukrainian government approved the conditions for the sale of the company. Specifically, the conditions provide for Centrenergo’s payment of dividends to the national budget in the amount of 30% of net profit for 2018, while the draft resolution contained the text on the payment of dividends in accordance with the standard approved by the government, which in 2017 was 75%, and 2016 50%.

The resolution also includes a recommendation to use coal produced in Ukrainian mines if it matches the cost and quality characteristics of coal of foreign origin, which was also added to the obligations of the winner of the tender. Most of the coal used in thermal power plants in Ukraine is produced in the disputed Donbas region and now unavailable, which has led to imports of coal from Russia.

Oligarch Kolomoisky steps in

Meanwhile, of the largest private gas producing companies Ukrnaftoburinnia has announced its intention to take part in the tender. The relevant information was published in the bulletin of the National Commission on Securities and the Stock Market dated November 26, according to Interfax news agency.

The company is controlled by controversial Ukrainian oligarch Ihor Kolomoisky and wealthy lawmaker Vitaliy Khomutynnik. In 2017, both expressed their interest in a privatisation tender  for a 99.567% stake in Ukraine’s state-owned Odesa Port Plant (OPP).

Ukrnaftoburinnia has joined five other companies, which are going to take part in the privatisation tender for the state-owned stake in Centrenergo.

Specifically, Kyiv-based company Forbes and Manhattan Ukraine, headed by member of the advisory board of the Canadian bank Forbes & Manhattan Mykhailo Spektor, has announced its intention to participate in the tender.

In addition, Belarusian unitary enterprise Neftebitumen Plant, owned by one of the largest Belarusian oil traders Interservice; Tbilisi-headquartered Georgian International Energy Corporation; and, Kyiv-registered Balance Group (its ultimate beneficial owner is ex-people's deputy Dmytro Kriuchkov, detained in Germany in July and suspected of embezzling Zaporizhiaoblenergo funds), will take part in the tender.

Kyiv-based Ukrdoninvest, whose beneficiary is businessman Vitaliy Kropachev, also plans to participate in the privatisation of the power generating company, Interfax news agency reported on November 22.

A leading candidate?

Meanwhile, Kyiv-based market experts believe that Kropachev - a businessman who has close ties with President Petro Poroshenko's team - has higher chances to secure control over the company. Kropachev is close to Ihor Kononenko, who is a close associate and long-time business partner of Poroshenko. Kononenko, the first deputy head of the Poroshenko Bloc faction in parliament, is regarded as a 'grey cardinal' on the Ukrainian political scene for his leading role in unofficial negotiations with other parliamentary factions.

Kropachev’s three coal cleaning facilities were added to his portfolio in 2016, after he reached agreements on their purchase with representatives of Mako Group run by Oleksandr Yanukovych, the eldest son of the former Ukrainian president, who fled the country in 2014.

Meanwhile, Chervonolymanska was acquired by Kropachev’s conglomerate in late 2017. Igor Humeniuk, a former member of the pro-Russian Party of Regions, acted as the seller of the asset: his companies were listed as the official owners of a majority shareholding in Donbasenerho, which went private serving Oleksandr Yanukovych’s interests, according to the Ekonomichna Pravda online outlet.

In February, Ukraine's leading energy conglomerate DTEK, controlled by fellow oligarch Rinat Akhmetov, complained that Centrenergo cancelled coal supply contracts and refuses to purchase its coal any more, buying from Kropachev's coal companies instead. Akhmetov has said he has no interest in bidding for Centerenergo.