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Power generating firms to offer new share issues in summer

Two power generating companies controlled by Russia's electricity monopoly Unified Energy System will offer newly issued shares to investors this summer, UES said Tuesday.

The company's CFO, Sergei Dubinin, said Wholesale Generating Company No. 4, which incorporates five thermal power plants, will offer about $1.5 billion in newly issued shares in July-August. Also, a Unified Energy System stake in the company will be sold for about $3 billion, Dubinin said. Territorial Generating Company No.1, which incorporates 55 electric power plants, will also place newly issued shares in the summer. In early May TGC-1 shareholders approved the placement of shares worth 18.75 billion rubles ($727 million) at par value, or 39.03% of the company's enlarged capital, Dubinin said.

Russia's power sector is undergoing radical changes aimed at increasing the efficiency of power plants and developing the industry by attracting investment. Once the reforms are complete, the potentially competitive sectors of the industry - generation, sales and repair companies - will become mainly private and will compete with one another. However, natural monopolies - power transmission and dispatching - will remain state-controlled. The UES CFO also said the sale of the Russian capital's electricity and thermal power utility Mosenergo was planned soon. Mosenergo is Russia's largest territorial generating company, supplying 80% of Moscow's heating requirements and 85% of power demand in the capital and the Moscow Region. The company has 17 power plants in the region, with electric power capacity of 10,700 MWt and heat capacity of 34,200 Gkal/hour.(