DTEK reports about losing control over its businesses located in the non-government controlled areas of Donetsk and Luhansk oblasts
The CEOs of DTEK assets, namely DTEK Komsomolets Donbassa Mine, Mospino CPE, DTEK Energougol ENE, DTEK Zuyivska TPP (a part of DTEK Skhidenergo), DTEK Donetskoblenergo, Tehrempostavka, DTEK Sverdlovanthracite, DTEK Rovenkyanthracite, Elektronaladka, DTEK Power Grid, and DTEK Service which are based in the NGCAs of Donetsk and Luhansk oblasts have received letters requiring re-registration of the companies in the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) and the launch of the inventory process.
DTEK is not in control of these companies anymore. The Group believes that the requirement for re-registration of its companies is unacceptable and nothing will force DTEK to change the jurisdiction of its assets.
"The situation is the result of the political conflict in Donbas, with the Ukrainian people, national business and the economy being caught up in the consequences of the conflict. The companies operating in the NGCAs belong to an integrated economic infrastructure of the country. With the break of this production chain the companies would not be able to operate as Donbas does not have any other coal sales markets and there are serious implications for all consumers and suppliers of equipment and materials for these companies. In fact, this means the shutdown of companies that would affect the Ukrainians on both sides of the contact line. This would result in a significant reduction of income and rise in unemployment," stated DTEK CEO Maxim Timchenko.
During these three years of the armed conflict DTEK businesses have been operating within the laws of Ukraine. Ukraine-registered DTEK companies in the NGCAs paid over UAH 2 billion in taxes to the national budget last year only. Ukrainian thermal power plants operated smoothly helping to balance the grid system. Salaries and social benefits were regularly paid to 36,000 employees.
"For three years we have been struggling to keep these companies within the economic infrastructure of Ukraine but we cannot ensure their stable operations anymore. DTEK will do everything it can to help our employees by offering them employment at other assets of the Group. I hope that the international judicial system and the supremacy of law will help DTEK restore control over its assets. Then we will be able to come back to normal operations," said Maxim Timchenko.
The company has applied to the law enforcement agencies of Ukraine, the State Fiscal Service, tax authorities and state funds in regard to the loss of businesses. DTEK has also engaged legal firms for protection of its interests within the national and international legal framework.