The amount of approximately 340 million rubles, which was earlier designed to be paid to the company’s shareholders, will be spent on technical modernization.

On May 27, two days after a cascading blackout in Moscow, AO Mosenergo’s board of directors held a meeting. It was decided to encourage the company’s shareholders to restrain from touching any part of the 2004 dividends. Dividends payable have been suggested to be cut from 0.0341 rubles down to 0.0221 rubles per share. Thus, instead of 964 million rubles, AO Mosenergo shareholders will receive 625 million rubles as dividends. Around 340 million rubles, raised in this way, will be directed to overhaul and reconstruction of equipment.

The main reason behind the Moscow power crisis proved to be a considerable wear-and-tear on the facilities. In the current situation AO Mosenergo has summoned up all its forces and means in the aim to liquidate as soon as possible the after-effects of the crisis and to upgrade run-down equipment. The board’s suggestions will be considered at the general meeting of shareholders on June 28, 2005.