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September 26, 2019

Results of the Board of Directors meeting on September 23, 2019

September 25, 2019. Moscow, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on September 23, 2019.


The Board of Directors approved the report on execution of PJSC RusHydro’s Annual Comprehensive Procurement Program for the first half of 2019. In the period, the Company has carried out 1,376 procurement procedures and achieved savings over budget in the amount of RUB 1.08 bn.


The Board of Directors determined the maximum price in the agreement between PJSC RusHydro and JSC TK RusHydro to provide comprehensive transportation services to RusHydro Group.

JSC TK RusHydro is a 100% subsidiary of PJSC RusHydro that provides transportation services to the parent company, its subsidiaries and companies since 2015. The prior agreement between the parties has expired.


The Board of Directors took into consideration the status on implementation of priority projects of thermal generation in the Far East as of June 30, 2019.


The Board approved participation of PJSC RusHydro in the authorized share capital of JSC Sakhalinskaya GRES-2, JSC CHP in Sovetskaya Gavan and JSC Yakutskaya GRES-2 in the form of entering into share purchase and sale agreement within the framework of increase of share capital via private offering. Following additional share issue, PJSC RusHydro will have a 100% stake in the share capital of the mentioned subsidiaries.

Additional share issue is necessary to finance the construction of thermal generating facilities in the Far East including capitalization of debt to PJSC RusHydro, incurred following construction financing.


The Board of Directors approved changes to calculation methodology of 2019 target KPIs of the company’s members of the Management Board.


The Board of Directors approved acquisition of additional shares of JSC DGK by PJSC RusHydro via conversion of intra-group debt into shares and restructuring of the Far East assets in the form of asset swap between PJSC RusHydro and PJSC DEK’s key minority shareholders. Documentation on the deal of swap of Luchegorsky coal mine, non-core asset of RusHydro, and Primorskaya GRES, DGK subsidiary, for minority shareholders’ stake in the share capital of Far East Energy Company )PJSC DEK( and Far East Distribution Company (JSC DRSK) is being prepared. The parties filed an application for authorization of the swap      transaction to the Federal Antimonopoly service of the Russian Federation.

JSC DGK debt portfolio (including intra-group loan of RUB 40.5 bn from PJSC RusHydro in the framework of forward contract with VTB) currently stands at RUB 65.8 bn. The asset swap with JSC DEK’s minority shareholders and subsequent debt capitalization will lower DGK’s debt load by more than 60% and improve its financial position, assuming introduction of economically justifiable tariffs, which will allow the company to concentrate on operations, modernize core equipment and implement a modernization program aimed at improved reliability of energy supply. In addition, the transaction will allow eventual transfer of new heat and power plants currently operated or developed by PJSC RusHydro to DGK, including 2nd phase of Blagoveshenskaya CHP, Vostochnaya CHP and Sovetkaya Gavan’ CHP.

Debt capitalization of JSC DGK and asset swap are to be completed before end of 2019.

JSC DGK (Far East Generating Company) is the largest power and heat generating company in the Russian Far East with electric installed capacity of 5,922 MW and heat generating capacity of 18,491 GCal/h. JSC DGK is 100% owned by PJSC DEK (RusHydro Group).

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