Moscow, 7 May 2008. RAO "UES of Russia" is pleased to announce that it has completed the sale of its 52.25% stake in OAO "Kaluga Retail Company".
Pursuant to the resolution of the Board of Directors of RAO "UES of Russia" of 31 August 2007, the stake in Kaluga Retail Company held by RAO "UES of Russia" was sold simultaneously with the retail company's additional share offering.
The proceeds from the sale of the RAO UES stake in Kaluga Retail Company amounted to RUB440.92 million, or RUB12.47 per share. The stake was purchased by OAO "Kaluga City Energy Company" which made the highest bid for the shares held by RAO "UES of Russia" and the additional shares in the retail company.
As a result of the transaction, Kaluga City Energy Company will hold 62.5% in OAO "Kaluga Retail Company".
The proceeds from the sale of the RAO UES stake will be used by RAO "UES of Russia", while the offering proceeds will be used to finance Kaluga Retail Company's project to build a GTU-CHPP in Obninsk.*
* OAO "Kaluga Retail Company" is pursuing a business diversification strategy. The company has four boiler houses having an installed capacity of 58 MW and supplying heat to 264 customers. The company's management has significant experience in the energy retail business as well as in energy generation and sales.
Currently, the city of Obninsk in the Kaluga Region does not have any electricity generation capacity, and electricity is supplied from other cities via electricity transmission lines. The lack of electricity generation facilities affects the reliability of electricity supply to the city's consumers. The electricity consumption in 2007-2011 is expected to grow by an average of 7.4 percent annually. The heat consumption is projected to rise to 120 Gcal/h in the next few years. The city is experiencing rapid residential housing development and construction of two technology parks.
The construction of a gas-turbine CHPP with the capacity of 15.8 MW of heat and 23 Gcal/h of heat will help reduce the capacity shortage in the energy node, increase the reliability of electricity and heat supply, and increase the share of OAO "Kaluga Retail Company" on the electricity and heat market.
The project is expected to be financed with a mixture of own funds and funds raised from outside resources, including through additional share offerings.