OREANDA-NEWS. February 8, 2008. Stock market analysts believe that the declarations as to the possible review of Dneproenergo’s financial rehabilitation plan has reduced the price of the company’s shares. According to the PFTS trading system, the company’s shares have dropped by over 2%, which is $33.09m.

The ‘Recent drop in Dneproenergo shares’ price is related to the statements made by the Prime-Minister, Yulia Timoshenko, about the possible review of the company’s additional issue of shares. The legality of the additional issue is being considered by the Supreme Economic Court on an appeal basis. Should the additional issue be confirmed, the shares of Dneproenergo will continue going up: the target price is UAH 2689 per share (the growth potential is 8-10%). Otherwise the capitalization of Dneproenergo will fall by $400 m, $200 m of which DTEK has already allocated for the settlement of the payable accounts and it has undertaken to invest the other $200 into the company’s development’, thinks Yan Lipchinskiy, an analyst of Sokrat Investment Group.

Currently, the shares of Dneproenergo have dropped by over 2%, which shows the negative implications of the declarations about the so-called re-privatization both for the power company and for the whole stock market.

‘Lately Dneproenergo’s shares have started to fall in price due to pending legal proceedings and, respectively, the uncertain future of the company,’ says Maksim Nikulyak, an analyst of IC Alfa Capital. ‘According to my forecasts, if the additional issue of Dneproenergo’s shares, which was approved at a shareholders meeting, remains in force, the shares of the company will gain in price. The growth will be due to the fact that DTEK has already signed an investment agreement stipulating an investment of $200 m into Dneproenergo’s development over the next five years. Furthermore, DTEK can supply cheaper and better quality coal to Dneproenergo. Today’s drop in the price of Dneproenergo’s shares mirrors a kind of middle case scenario between the high case of DTEK’s presence and the position of the head of government which is negative for the company due to the cancellation of the additional issue’.