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Unified Energy System

December 29, 2007

RAO "UES of Russia" sells buyback shares on OTC market

Moscow. 29 December 2007. RAO "UES of Russia" will sell its shares bought back from shareholders in accordance with Board of Directors resolution as of 14 December 2007. The decision was taken by RAO UES Board of Directors by absentee vote on 27 December 2007.

The buyback shares are to be sold on over-the-counter (OTC) market.

Requests to buy back shares were made by a number of shareholders who had an entry in the RAO UES shareholder register as of 23 August 2007 and voted against the proposed final reorganization of RAO UES at EGM on 26 October 2007 or didn't take part in voting. The deadline for buyback requests was 10 December 2007.

Under the Federal Law, RAO UES is to buy back shares by 9 January 2008. The buyback price stands at RUB32.15 per ordinary share and RUB29.44 per preferred share.

In accordance with Board of Directors decision, RAO UES will put up for sale 2,797,296,335 ordinary and 404,885,193 preferred shares what totally make 7.43% of RAO UES stock.

The buyback shares are to be sold through purchase and sale agreements at a price equal to a weighted average price of a RAO UES share at Moscow Interbank Currency Exchange (MICEX) for three weeks before signing of an agreement but not below the buyback price. 10 million shares is a minimum lot for a single bidder to buy. Shares pass into an investor ownership only after they are fully paid for with cash assets.

Call for bids and signing of agreements start on 9 January 2008. Potential investors in RAO UES buyback shares may turn to Investor Request Processing Center in the RAO UES headquarters: 119526, Moscow, prospekt Verdnadskogo 101, bldg. 3, room D-208. Tel.: +7-495-7104873.

RAO UES Board of Directors instructed the Management Board to submit not later than March 2008 for Board of Directors consideration the question of further disposal of undigested shares in case RAO UES holds the latter.


* On 14 December 2007 RAO UES Board of Directors approved the report on the results of shareholder requests for share buyback. Under the Federal Law On Joint-Stock Companies, in terms of money the legal maximum volume of shares for buyback is up to 10 percent of a company's net asset value as of the last record date before the decision on the reorganization. In RAO UES case, the sum totals RUB101,852.9 million. Shares with aggregate value of RUB103,039.8 million were requested for buyback.

Since the amount of funds required for buyback exceeded 10 percent of RAO UES net asset value, RAO UES Board of Directors approved an index of 0.988480997670 to determine the number of shares to buy back from shareholders.

RAO UES Management sent a letter to Board of Directors members in connection with discovering a clerical mistake in the documents to the Board of Directors session as of 14 December 2007. The index to determine the number of shares to buy back was misprinted with an extra character, fifth decimal place. However all the appendixes to the buyback report, memorandum, Board of Directors session minutes, and press-release had the correct index of 0.988480997670. Most importantly the correct index was applied to calculate a number of shares to buy back.

RAO UES Management have brought apology to Board Chairman and Board of Directors members for the clerical mistake and coordinated with them an introduction of the correct index to the buyback report.

 

 

 

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