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Finnish Fortum fights Gazprom over TGK-1

The Finnish energy giant Fortum is ready to cash out €240 million ($329.6 million) for additional shares in the main northwest Russian energy generator TGK-1, Vedomosti reports. With its investment eager, the Finnish company could hamper Gazprom's appetite for the energy company.

Gazprom has clearly signaled that it wants control over the Territorial Generating Company Number One (TGK-1) – one of the main electricity generators in Northwest Russia. The Russian giant will however have to fight another giant, the Finnish Fortum, in order to get the control.

Fortum already controls 25,48% of TGK-1, and has openly stated that it wants a major share of the upcoming emission in the company. Other main shareholders are RAO UES with 55,7% and Norilsk Nickel with 7,37%. The TGK-1 will this fall conduct a 32,4 billion rubles ($1.27 billion) stock emission, which is to help the company place new investments into new assets and industrial modernization. The RAO UES, the electricity monopoly controlled by Anatolii Chubais, will not participate in the tender for the new shares, Vedomosti report. Thus, Gazprom and Fortum are the two most likely contenders for the shares.

Gazprom is unlikely to get its desired level of control over TGK-1 through the stock emission alone. The company could however later secure full control over the company. The RAO UES has already announced that it plans to sell 18% of its stake, and Gazprom will be the most likely buyer of this stake. In addition, Norilsk Nickel could at a later stage decide to sell its 7,37% to the Russian gas monopoly. Subsequently, Gazprom might end up with more than 50% of the TGK-1. (