Moscow, 25 August 2006. With effect from today, ZAO "INTER RAO UES" starts acceptance of bids for a blocking stake (25% plus one share) in OAO "Severo-Zapadnaya CHPP". The shares will be sold as a single lot.
The auction will be held on 31 October 2006; bids are accepted from 25 August through 23 September 2006.
The shares will be sold by ZAO "INTER RAO UES" through a public auction in accordance with the applicable laws of the Russian Federation, the resolution of the Board of Directors of RAO "UES of Russia" of 21 November 2005**, and the resolution of the Board of Directors of ZAO "INTER RAO UES" of 23 January 2006. Companies related to ZAO "INTER RAO UES" may not take part in the auction.
The auction starting price is USD111 million, with a bid increment of USD0.5 million.
The auction winner will be the bidder that offers the highest price for the shares. The auction results signed by the auction organizer, ZAO "INTER RAO UES", and the auction winner, will be equivalent to the execution of a preliminary contract for purchase/sale of shares in OAO "Severo-Zapadnaya CHPP". Under the auction terms, the winner is required to furnish to the auction organizer a permission from the Russian authorities for its acquisition of the shares. In the event that the successful bidder fails to receive the approval of the Russian Federal Antimonopoly Service regarding the acquisition of the shares, the award will be made the next best bidder. Full payment for the stake must be made within 65 calendar days after the execution of the auction results report.
The "Data Room" for financial and legal examination of the asset by the bidders will be open on 11 September through 22 October 2006.
The Auction Notice in Russian is available for examination in the section Purchases and Announcements / Information about purchases and sales in OAO RAO "UES of Russia" on the Company's website (https://www.rao-ees.ru).
* OAO "Severo-Zapadnaya CHPP" is the first Russian state-of-the-art combined-cycle power plant using highly efficient and sustainable technologies to generate electricity and heat. The power plant is located in the North West Federal District (Primorsky district of St.-Petersburg).
The first 450 MW combined-cycle generating unit was brought on line in December 2000. Construction of the second 450 MW and 350 Gcal/h generating facility at the Severo-Zapadnaya CHPP is nearing completion. The facility is scheduled for commissioning in the second half of December 2006.
It is planned that, by the beginning of the 2006/07 heating season, a heating main connecting the power plant with the Primorskaya Boilerhouse in St.-Petersburg will be launched and the Severo-Zapadnaya CHPP will start to supply heat.
Since September 2004, the power plant has been run by the international consortium, OOO "Enel ESN Energo", which won the tender held by RAO "UES of Russia".
The authorized capital of OAO "Severo-Zapadnaya CHPP" is RUB166,804,580 and comprises 16,680,485 ordinary shares of RUB10 par value each. The major shareholders are RAO "UES of Russia" (66.45%), ZAO "INTER RAO UES" (25% plus one share), OAO "Lenenergo" (3.07% ), and OOO "Lentransgaz" (2.71%).
** On 21 November 2005, the Board of Directors of RAO "UES of Russia" approved the terms of the auction for sale by ZAO "INTER RAO UES" of its 25% plus one stake in OAO "Severo-Zapadnaya CHPP". It also approved the essential terms and conditions of the contract for purchase/sale of the stake in OAO "Severo-Zapadnaya CHPP".
In 2005, ZAO "INTER RAO UES" acted as investor in the project to complete the construction of the second power unit of OAO "Severo-Zapadnaya CHPP". ZAO "INTER RAO UES" acquired the third issue of shares in OAO "Severo-Zapadnaya CHPP". The project envisaged the disposal by ZAO "INTER RAO UES" of its stake (25% plus one share) in OAO "Severo-Zapadnaya CHPP" to a third party through an open auction.
The approved arrangement helped shorten the time frame needed to finance and build the second power unit at the Severo-Zapadnaya CHPP.
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