RAO UES Holds Auction to Sell Off the Blocking Stake in RCS
Moscow, 22 May 2008. Today, RAO "UES of Russia" held an auction to
sell off its blocking stake (25% plus one share) in OAO "Russian Communal
The public auction was arranged by CIT Finance Investment Bank (OAO) and OAO
"Urals Energy Management Company". Bids for the auction were accepted from 21
April through 21 May 2008.
The reserve price was equal to the fair market value of RUB3.1 billion determined based
on the report prepared by a consortium of independent appraisers, with a price increment
of RUB100 million.
There were two bidders for the RCS stake.
The auction winner, INDVILLE. MANAGEMENT. LIMITED, purchased the shares at the reserve
price of RUB3.1 billion (USD131 million), or RUB310 per ordinary share.
After the auction, RAO "UES of Russia" and the auction winner signed the
Auction Minutes and the Share Purchase Agreement in respect of the RCS shares.
The proceeds from the sale are threefold greater than the amount spent by RAO "UES
of Russia" on the RCS project. RAO UES spent a total of RUB1 billion on building up a
blocking stake in RCS and investments in the company's development by purchasing the
The proceeds from the sale of the shares in RCS will be used to repay the debts raised
by RAO UES to finance its investment projects in the electricity sector and RAO UES
The RCS project was launched in 2003. Over the five years of the company's operation,
its market capitalization increased by RUB11 billion. Today, RCS operates in 12 regions of
Russia and almost 200 municipalities – in the Altay Kray, Amurskaya Region, Bryansk
Region, Vladimir Region, Kirov Region, Nizhny Novgorod Region, Sverdlovsk Region, Tver
Region, Karelia Republic, Republic of Udmurtia, and Perm Kray. In future, the company
plans to expand its activities in the regions where it is present. The priority regions
for RCS are the Urals and Volga Region, where the IES-Holding, the company's key
shareholder is already operating. The company has long-term agreements (with terms from
one to forty-nine years) with regional and municipal authorities.
Currently, RCS is implementing its RUB4-billion investment program which is intended to
modernize the utilities sector facilities in the regions. The program will be implemented
in three years (2006-2008).