Moscow. 3 November 2006. On 1 November 2006, OAO "TGC-1" completed all legal and corporate actions to effect the merger of OAO "Petersburg Generation Company", OAO "Kolskaya Generation Company", OAO "Karelenergogeneratsiya", and OAO "Apaptitskaya CHPP" with and into OAO "TGC-1".

Before the merger, OAO "TGC-1" had operated using lease arrangements. The companies' merger with TGC-1 was approved by the shareholder meetings of the RGCs and TGC-1, respectively, held 21 July 2006 and the joint shareholder meeting of TGC-1 and the RGCs held 11 September 2006.

On 1 November, the merged companies' shares were converted into shares of the surviving entity, TGC-1, and all shareholders in the merged companies became TGC-1 shareholders.

In the future, shareholders in OAO "Murmanskaya CHPP" will exchange their shares for additional shares in TGC-1 approved for issuance by TGC-1 shareholders on 21 July 2006. The share exchange is expected to take place in Q1 2007. After that, the target structure of TGC-1 will be finally formed, and the Murmanskaya CHPP will become a TGC-1 subsidiary.

Consolidation of TGC-1 and its subsidiaries through share exchange means that the process to create the intended structure of the electricity sector has been completed almost at all of the companies run by Business Unit 1 of RAO "UES of Russia".

Alexander Chikunov, member of the Management Board and Managing Director of RAO "UES of Russia" (Business Unit 1) said in a statement that the priority for the generation companies of his Business Unit would be to raise massive private investment and implement investment projects. Business Unit 1 will focus on improving operational efficiency and stepping up investments in its companies.

Also on 1 November, official registration was granted to OAO "Yuzhno-Yakutskaya Energy Company", a spin-off of OAO "Yakutskenergo".

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