Preliminary Results of TGC-14 Share Offering and Sale
Moscow 23 June 2008. Today, the RAO "UES of Russia"
Tender Commission determined the price for the sale of the 33,6% block of shares in OAO
"TGC-14"* owned by RAO "UES of Russia", which are attributable to the
Having analyzed the bids received, the Tender Commission determined
that the highest price was offered by the company Energopromsbyt, namely, RUB 0.0074 per
one share or $464 per kW of installed capacity.
The TGC-14's Board of Directors has determined the offering price for
the additional shares of the company. As provided by the resolutions previously adopted by
the Board of Directors of RAO "UES of Russia"**, the sale of the TGC-14's shares
from the "government stake" and the sale of the additional shares are carried
out at the same price to one strategic investor. Therefore the price of the additional
shares offering was based on the maximum price offered by the strategic investor for the
The final quantity of the additional shares of TGC-14 to be issued to
Energopromsbyt will be announced on 1 July 2008 after the shareholders of the TGC
exercised their pre-emption right on the additional shares.
As a result of sale of the "government stake" shares RAO
"UES of Russia" will raise over RUB 1.8 billion in private investments. Offering
of additional shares may generate for TGC-14 some RUB 4.29 billion in proceeds. Thus, the
total amount of funds expected to be raised from the additional share issue and the sale
of the "government stake" shares in TGC-14 is in excess of RUB 6 billion.
After the sale of the "government stake" and the additional
share offering, the shareholding of RAO "UES of Russia" in TGC-14 will decrease
from 49.66% to 9.19%. This stake will be distributed among the RAO UES minority
shareholders in course of the final phase of the Company's reorganization.
The funds raised by TGC-14 as a result of the additional share offering
will be used to expand its generation capacities under the framework of the company's
investment programme for the period until 2012. Among the company's priority projects are
reconstruction of the 1-st and 2-nd units at Ulan-Ude CHPP-2 and of the 2-nd unit of Chita
CHPP-2. The proceeds from the sale of the "government stake" shares in TGC-14
will be used to finance the investment programme of Federal Grid Company.
To date, the procedures of additional share offerings to investors have
been completed at 17 WGCs and TGCs. These are WGC-2, WGC-3, WGC-4, WGC-5, WGC-6, TGC-1,
TGC-2, Mosenergo (TGC-3), TGC-4, TGC-5, TGC-6, Volzhskaya TGC (TGC-7), SGC TGC-8, TGC-9,
TGC-10, Kuzbassenergo (TGC-12) and Yeniseiskaya TGC (TGC-13). The total amount of funds
raised through the share offerings made RUB 442.63 billion. These funds will be
used to finance the generation companies' investment projects.
Another RUB 388.35 billion in private investments has been
raised as a result of sale of the "government stake" in 14 generation companies
- WGC-3, WGC-4, TGC-1, TGC-2, Mosenergo (TGC-3), TGC-4, TGC-6, Volzhskaya TGC (TGC-7), SGC
TGC-8, TGC-9, TGC-10, TGC-11 and Yeniseiskaya TGC (TGC-13), as well as the "blocking
stake" (25 percent plus one share) in WGC-5. The proceeds from the sale of the
"government stake" will be used to finance the investment programmes of the
Federal Grid Company and Hydro WGC.
Thus, taking into account the additional TGC-14 share offering and the
sale of the "government stake" in this company, the total amount of private
investments raised for the Russian electricity sector through additional issue and sale of
WGC and TGC shares will exceed RUB 837 billion.
*OAO "TGC-14" supplies heat and electricity to consumers
in the Chita Region and the Republic of Buryatia. The plants comprising OAO
"TGC-14" have an aggregate installed capacity of 533 MW. Currently, the TGC-14's
authorized capital amounts to RUB 777,945,609 and comprises 777,945,609,114 ordinary
shares, RUB0.001 par value each.
** The resolution to sell the TGC-14 shares in the "government
stake" simultaneously with the additional share offering for the same price was made
by the Board of Directors of RAO "UES of Russia" at its meetings on 18 January
and 29 February of 2008.