29 Mar 2011 07:00
Federal Grid Company EGM approves transaction with INTER RAO UES
Moscow, 29 March 2011- JSC "Federal Grid Company of Unified Energy System" ("Federal Grid" or the "Company", ticker symbol: FEES on MICEX, RTS and LSE) announces that on 23 March 2011 an Extraordinary General Meeting of Shareholders (EGM) was held in accordance with the decision of the Company's Board of Directors of 9 February 2011 to convene the EGM.
Shareholders approved the related party transaction and the terms thereof between Federal Grid and INTER RAO UES (the "Transaction") for the acquisition of additional issued ordinary shares of INTER RAO UES in exchange for stakes in various electricity generating companies.
Pursuant to the approval, the Company will acquire a maximum of 1,470 billion additional shares of INTER RAO UES. Federal Grid will acquire the additional shares in exchange for its stakes in the following companies: OGK-1, RusHydro, OGK-2, OGK-3, OGK-4, OGK-6, TGK-1, TGK-2, Mosenergo, Quadra, TGK-6, Volga TGK (TGK-7), TGK-9, Fortum (TGK-10), TGK-11, Kuzbassenergo (TGK-12), TGK-11 Holding, Bashkirenergo, Yenisei TGK (TGK-13), TGK-14, Sangtudinsky HPP-1 and GrusRosenergo.
The total value of the Transaction will be up to approximately RUB 78.65 billion (circa US$ 2.77 billion).
In a separate transaction, LLC Index Energetiky - FGC UES, a wholly-owned subsidiary of Federal Grid, will acquire a maximum of 413.62 billion additional issued ordinary shares of INTER RAO UES in exchange for its stakes in various electricity generating companies for a total value of approximately RUB 22.13 billion (circa US$ 0.78 billion).
As a result of both transactions, Federal Grid will own a stake of up to 20% minus one share and jointly with its affiliates, including LLC Index Energetiky - FGC UES, up to a total of 25% shares in INTER RAO UES.
The list and value of the shares in generation companies to be sold by the Federal Grid group were approved by the Board of Directors of Federal Grid based on evaluation carried out by a consortium of independent appraisers, namely Deloitte, Institute for Enterprise Issues and Nexia Pachioli Consulting. Credit Suisse provided the Board of Directors of Federal Grid with a financial fairness opinion on both transactions. Xenon Capital Partners was the financial adviser to Federal Grid in relation to the transactions.
About Federal Grid Company
Federal Grid is the operator and manager of Russia's unified electricity transmission grid system. With over 121,000 km of transmission lines and over 305 GVA of installed transformer capacity, it is the largest publicly traded electricity transmission company in the world.
Federal Grid's business is to provide transmission and connection services to the Russian wholesale electricity market. It maintains and develops the grid system and supervises grid facilities and infrastructure in 73 regions of Russia, in which it operates. Its customers are regional distribution companies, retail electricity supply and large industrial enterprises The Company operates in an exclusive, competition free environment, and is regulated by the Government of the Russian Federation.
The Company's revenue is mainly driven by the transmission tariff set by the Regulator, the Federal Tariff Service. From 1 January 2010 a new RAB (Regulatory Asset Base) tariff framework, designed to stimulate investment and operating efficiency, was introduced.
The Company was incorporated in June 2002 as part of reorganization of Russia's electrical power industry. The Russian government is the largest shareholder with a 79.48% stake.
Further information can be found at www.fsk-ees.ru/eng. Neither the content of the issuer's website nor the content of any other website accessible from hyperlinks on the issuer's website is incorporated into, or forms part of, this announcement.
DISCLAIMER
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Federal Grid. One can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," or the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements.