ILF was contacted by a private investor wishing to participate in the bidding on the public shares of Oblenergo, which amount to 60%. The rest of the shares belong to another private investor. ILF's client was worried that, due to Oblenergo undergoing transition from public to private joint-stock company, which carries the risk of privatization without bids, the current private investor could simply buyout the public shares.

Many joint-stock companies today, including those whose shares belong to the state, are considering moving to the private sector. This is due to new legislation coming into force on January 1, 2018. After this date, all public joint-stock companies must be registered by at least one stock exchange. In order to perform this procedure, a public joint-stock company has to meet rather steep requirements (such as UAH 400 million net annual income). Practice shows that most public joint-stock companies aren’t up to the task. At the same time, the transition from public to private sector does not automatically give shareholders the right to privatize public shares without bids.

ILF makes it clear that such a right depends on 2 key criteria: 1) which privatization group public shares belong to according to the law; and 2) whether the private joint-stock company’s Charter allows for preemptive rights. Oblenergo belongs to the group that is of particular importance to state economy and security. In accordance with the law, public shares can only be sold through bidding on a competitive basis and with free access to all buyers. This rule persists even after Oblenergo's transition, and even if its Charter grants preemptive rights to the current investor to buyout public shares.

ILF experts on public-private partnerships Anton Zinchuk, Irina Selivanova and Aliona Pelypenko performed Oblenergo’s legal audit and prepared a roadmap for the privatization of its shares through bidding. As a result, ILF’s client was able to analyze investment risks and make an informed decision.