Fortum buys Russian power generating company TGK-10


Finnish power and heat company Fortum has acquired the Urals-based generating firm TGK-10, the Russian company said on Wednesday.

A controlling stake in TGK-10 was acquired by Fortum’s subsidiary, Fortum Russia B.V., the Russian company said. “The controlling share package was formed through the acquisition of TGK-10 newly issued shares placed via public subscription and the acquisition of a government stake in the company held by Unified Energy System of Russia,” TGK-10 said in a statement.

The Russian power sector has undergone radical changes in recent years aimed at increasing the efficiency of power plants and developing the industry by attracting investment. During the restructuring process, specialized structures have been created in place of the old vertically integrated companies. By the end of the reforms, potentially competitive parts of the industry - generation, sales and repair companies - will become mainly private and will compete with each other. However, natural monopoly functions - power transmission and dispatching - will remain state-controlled.

Russia’s electricity giant Unified Energy System on Tuesday posted a net profit calculated to Russian Accounting Standards (RAS) of 452.8 billion rubles ($19.3 billion) in 2007. The company attributed the significant size of its net profit in the reporting period to the revaluation of investment in its affiliated companies listed on the MICEX and the Russian Trading System (RTS) stock exchanges. At the same time, UES said revenues from revaluation were unsecured by cash flows. Net profit excluding revaluation totaled 28.78 billion rubles ($1.2 billion) in 2007, up 4.9% on 2006, UES said. Compared with 2006, UES’ RAS net profit declined 37.5%, the company said. (

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