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Unified Energy System

December 18, 2007

Kuzbassenergo completes new share issue

Moscow, 18 December 2007. OAO "Kuzbassenergo" (TGC-12) has completed its additional share offering.

On 6 to 17 December 2007, the company issued 100,000,000 additional shares, RUB1 par value per share (which makes 16.53 percent of its capital prior to the offering and 14.16 percent after the offering) through open subscription. Investors' demand for shares significantly exceeded the number of the offering shares. The bid came from both institutional and strategic investors.

The existing shareholders of Kuzbassenergo purchased 44,613,712 additional shares under the pre-emptive right, which makes 7.36 percent of the TGC-12 capital prior to the offering and 6.32 percent after the offering, or 44.61 percent of the total number of the offering shares.

The company accepted eight bids for the remaining 55,386,288 additional shares in Kuzbassenergo which were offered to the public.

Pursuant to the resolution of the Board of Directors of Kuzbassenergo, the additional shares were sold at RUB75 per share. This price was set based on the recommendations given by the banks acting as financial advisors and upon review of the bids received from the potential strategic investors. It is 10% higher than the market price of the company's shares (RUB68.1 per share, the MICEX opening price as of 4 December, the date on which the offering price was determined).

The proceeds from Kuzbassenergo's share offering will amount to RUB7.5 billion, or $304 million. They will be used to finance the project to construct a new 660 MW power unit at the Tom-Usinskaya TPP, which will help reduce the energy shortages in the Southern energy area of the Kemerovo Region and increase the reliability of electricity supply. The efficiency of electricity generation by the TPP will be improved owing to the use of advanced technologies which help reduce the fuel rate.

The shares owned by RAO "UES of Russia" that are attributable to the government stake will be offered to the general public at a later date, after the Russian Government adopts a resolution in that respect. This is due to the fact that the stakes in OAO "Kuzbassenergo" were contributed to the capital of RAO "UES of Russia" in the course of the Company's establishment, which is why their disposal is subject to approval by the Russian Federation Government.

133,768,659 ordinary shares of Kuzbassenergo will be offered for sale. As resolved by the Board of Directors, the per share price at which the "government stake" shares will be sold must not be lower than the per share price of the new share offering. The proceeds from the sale of the "government stake" shares in Kuzbassenergo will be used to finance the FGC Investment Programme.

***

By now, additional share offerings have been completed by four wholesale generation companies (WGC-2, WGC-3, WGC-4, and WGC-5) and five territorial generation companies (TGC-1, Mosenergo (TGC-3), TGC-5, SGC TGC-8, and Kuzbassenergo (TGC-12). The aggregate amount of funds raised by these generation companies through the share offerings is in excess of RUB293 billion, or about $12 billion.

Another RUB234 billion, or nearly $9.5 billion, in funds will be raised from the sale of the "government stake" shares in WGC-3, WGC-5, WGC-4, TGC-1 SGC TGC-8, and TGC-9 owned by RAO "UES of Russia". Taking into account the sale of the "government stake" shares in Mosenergo (TGC-3) approved by the Board of Directors of RAO "UES of Russia" on 30 November 2007, as well as the TGC-9 share sale and additional share offering, the total amount of private investments in the electricity industry will make almost RUB605 billion, or $25 billion.


Contact Information:

Stas Degtyarev
Press Office Expert
+7 (495) 710-6239

Shareholder Relations
+7 (495) 620-1609

 

 

 

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