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Italy’s Enel wins control of Russian OGK-5

Italy’s biggest utility Enel has taken a majority stake in Russian power producer OGK-5 after a buyout offer to minority shareholders, Enel said in a statement on Friday.

Shares totaling 15.74% of OGK-5’s share capital were tendered through the buyout, increasing Enel’s stake to more than 50%. “These shares, combined with the stake of 37.15% already acquired by Enel before the buyout offer was made, raise Enel’s stake in OGK-5 to 52.89% as of Feb. 11, 2008,” the statement said. It added that the results were preliminary as the transfer of shares was still subject to regulatory approval in Russia, which it expects in a matter of days. Enel made the buyout offer of 4.4275 rubles per share in November, giving minority shareholders 80 days to accept it. Under Russian corporate law, an investor with a more than 30% stake in a listed company is obliged to make an offer to minority stakeholders. Enel has said it does not intend to raise its stake above 74%.

OGK-5 is one of six wholesale generating firms being spun off from Russia’s former electricity monopoly Unified Energy System (UES) under reforms designed to attract investors and create a competitive market for power. Foreign and Russian strategic investors have shown strong interest in buying into the Russian generation companies, betting on growing demand and a gradual tariff liberalization, that will see electricity prices grow over the next four years. Enel and Germany’s E.ON have already bought stakes in two OGKs, while Gaz de France and Korea Electric Power Corp (KEPCO) have shown interest in entering Russia’s power sector. (Reuters)