August 6, 2021. Moscow,
RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces
that it has signed an agreement with Transenergoprom to divest 100%
share in JSC Chuvash Energy Retail Company.
Earlier RusHydro’s Board of Directors approved
divestment of the Group’s shareholding in JSC Chuvash Energy Retail
Company for RUB 300 mn according to an independent appraisal.
The transaction allows RusHydro to optimize its
retail assets and improve financials. Once completed, RusHydro’s
debentures will decrease by RUB 1,500 mn, the Company’s guarantees
on Chuvash Energy Retail Company’s loans will be terminated and any
risks of additional funding of its operations in the event of
unfavorable macroeconomic factors and deterioration of consumers’
financial discipline will be eliminated.
Chuvash Energy Retail Company is the largest
electricity retail company and a guaranteed electricity supplier in
the Chuvash Republic. It has been a part of RusHydro Group since
2008. Since then a number of measures to improve its financial
efficiency took place including optimization of operational expenses
and gradual transition to reference electricity retail tariff model.
Nonetheless, continuous nonpayment by a number of
major consumers in the region as well as overall deterioration of
financial discipline negatively affected Chuvash Energy Retail
Company’s performance compounded by high leverage which RusHydro
had to cover by loan guarantees before lending companies.
In light of the above mentioned, RusHydro has made
a decision to optimize its electricity retail business by means of
divestment of Cuvash Energy Retail Company’s shares to
Transenergoprom, a strategic investor, which offered the most
favorable transaction terms. Transenergoprom has plans to expand its
business in the Chuvash Republic through expansion of consumer base
by offering a wide range of services in the housing and utilities