The State Property Fund of Ukraine has initiated change of the management of PJSC “Cherkasyoblenerho” due to low productivity and blocking privatization

The State Property Fund of Ukraine has initiated dismissal of Oleh Samchuk, the Chairman of the Board of PJSC “Cherkasyoblenergo”, due to non-fulfillment of the assigned tasks, threat of decline in the quality of services and blocking of enterprise’s preparation for privatization.

There are parts of authorized capital of 6 CHPs under the State Property Fund of Ukraine’s management. Following the approval of the stimulating model of tariff setting for electricity distribution companies in 2020 year, the window of opportunities has opened for privatization of mentioned objects on the best terms for the State.

PJSC “Cherkasyoblenergo” is one of attractive objects to encourage investments. Precondition of the successful sale of the state equity portion is elimination of existing obstacles, in particular, payment of about UAH 1.7 billion of debt of PRJSC “Azot”, a part of “Ostchem” Holding. Solving this problem was one of the key tasks of the enterprise’s management, chaired by Oleh Samchuk who held the position from 2017 year.

In its turn, PJSC “Cherkasyoblenergo” has accounts payable in amount of UAH 2.1 billion, UAH 450 million of which are refundable financial assistance of PRJSC “Azot”.

Settlement of the issue of debt payments is key for privatization of the state share of PJSC “Cherkasyoblenergo”, since existence of debts significantly reduces the value of asset on the auction and questions its investment attractiveness.

However, in three years PJSC “Cherkasyoblenergo” hasn’t coped with assigned tasks. Proposed settlement agreements, signed with PRJSC “Azot”, disadvantaged the enterprise of the state sector of economy. Thus, debt payment schedule provided for payment of 60% of debts just in 5 years. Until then, PJSC “Cherkasyoblenergo” would receive just a small amount from outstanding receivables.

Mentioned agreements the NABU cancelled by appeal of the State Property Fund of Ukraine. The Fund continues cooperation with law enforcement bodies on verification of PJSC “Cherkasyoblenergo”’s management activities that would damage the State.

In addition, according to the National Energy and Utilities Regulatory Commission of Ukraine (NEURCU), PJSC “Cherkasyoblenergo” still doesn’t have the development plan for 2021 – 2025 years. In the opinion of the NEURCU, such situation can give rise to non-completion of activities of investments programs for 2021 year, accidents occurrence, slowdown of the outdated equipment update rate, halting of new objects construction and, as a result, failure of providing the consumers with good quality electricity services.

The State as a shareholder can influence on the enterprise’s policy exceptionally by establishing financial plans and appointing the management – other means of influence is not provided by the law.

Taking into account all the above, the only solution to the existing problems is to change management and appoint the acting Chairman of the Board in order to improve the quality of the state assets management, as well as to remove obstacles to the privatization of the state block of shares.

The State Property Fund of Ukraine offered to the post of acting Chairman of the Board a person who once brought PJSC “Cherkasyoblenergo” out of the crisis – Horobets Viacheslav Viktorovych, who is well acquainted with the team and has already proven to be an effective manager.

Traditionally, for enterprises of public sector of economy, the previous head makes every effort to stay in office, and tries to raise the information wave in his support.

It should be noted that the statements of the current Chairman of the Board, in which accusations of bias are heard, are not true.