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disappointment.
Ferrexpo concentrates 100% of PGOK shares. Ferrexpo Poltava Mining, the main Ukrainian production asset of Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO LN), announced in a June 20 regulatory release that Ferrexpo AG had accumulated 100% of FPM’s shares. The increase of Ferrexpo AG’s stake from the previous 99.11% was the result of a squeeze out, according to the release. On May 20 FPM announced that the price for Ferrexpo AG’s squeeze out of FPM’s minority shareholders will be UAH34.24 ($1.31) per share. The squeeze out will be positive for Ferrexpo because it improves corporate governance by eliminating the bureaucratic burden and legal risks attached to the current quasi-public status of most Ukrainian companies, including FPM. The squeeze out was also cheap for Ferrexpo because it acquired FPM’s shares at a 1.3x P/E multiple (using 2018 net income).
● DTEK
Ukraine’s leading coal and power producer DTEK Energy produced 9.45mmt of raw coal in 5M19, or 1.7% less y/y, according to Concorde Capital calculations based on sector-wide data provided by Interfax-Ukraine. Total production of steam coal in Ukraine decreased 4.5% y/y to 10.70mmt in 5M19, with DTEK’s share rising to 88% from 86% a year before. In May alone, DTEK Energy produced 1.86mmt of coal, which is 0.5% more y/y and 0.2% less compared to April, on a daily average basis.
● Other
Metinvest affiliate Pokrovske Coal boosts coal production 21% m/m in May. Private joint stock company Pokrovske Coal produced 13.2 kt of raw coal per day in May, a 20.6% m/m jump, according to Concorde Capital’s analysis of Energy Ministry data, as reported by Interfax-Ukraine on June 19. In 5M19, Pokrovske Coal produced 1.77mmt of coal, a 3.4% y/y drop. Recall, Pokrovske Coal said in its 2018 annual report that it plans to boost coal production 42% y/y to 5.63mmt in 2019.
73 UKRAINE Country Report July 2019 www.intellinews.com