A regular meeting of JSC RusHydro's (ticker symbols: RTS, MICEX, LSE: HYDR; OTCQX: RSHYY) Board of Directors was held in absentia September 8th, 2010.
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The Board of Directors approved the financing structure of the BEMO project (the Boguchanskoe Energy and Metals Complex), which stipulates the provision of financing in a total amount of up to RUR 50,010,000,000 by concluding loan agreements between OJSC Boguchanskaya HPP and CJSC BoAZ (the Boguchansky Aluminium Smelter) on the one side and Vnesheconombank on the other side.
In accordance with a decision of VEB's Supervisory Board, RUR 28.1 billion will be allocated for hydro-power plant construction, whereas RUR 21.9 billion (USD equivalent) will be allocated for aluminium smelter construction. The loan term for completing construction of the Boguchanskaya HPP is 16 years, while the loan for the Boguchansky Aluminium Smelter will be for a 14-year term. Cash flow from BEMO complex facilities, which are generated from electricity and aluminium sales revenues less outlays on sale, will be used to repay the loan. Property and shares of project companies (CJSC BoAZ and OJSC Boguchanskaya HPP) will be treated as collateral for the loan. In addition, loan terms for completing construction of the Boguchanskaya HPP stipulate that in certain cases JSC RusHydro will have to provide collateral for the loan, for example, in the case of failing to meet the deadline for when the HPP is to be put into operation.
To execute the Partnership Agreement between JSC RusHydro and UC RUSAL talks were held with the State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)' to attract project financing for constructing the Boguchanskaya HPP and the the Boguchansky Aluminium Smelter. On July 28th, 2010, conditions of BEMO project financing (in terms of the Bank's obligations) were approved at a meeting of Vnesheconombank's Supervisory Board.
In accordance with Clause 1 of Article 12.1 of JSC RusHydro's Articles of Association, setting the Company's priority spheres (including: the Boguchanskaya HPP construction project) falls under the competence of the Company's Board of Directors.
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The Company's Board of Directors made a decision to hold an Extraordinary General Meeting (EGM) of the Company's shareholders October 22th, 2010 in the form of voting in absentia with the following approved agenda items:
1. Approving transactions which have been identified as being of interest;
2. Increasing the Company's authorized capital via a follow-on share placement.
The list of the Company's shareholders entitled to participate in the EGM will be compiled as of September 14th, 2010. Notification of the EGM will be published in Izvestiya newspaper and on the Company's corporate web site (https://www.rushydro.ru) on or before September 22nd, 2010.
Those entitled to participate in the EGM can familiarize themselves with details and any other necessary information at the location where the EGM will be held (on the day of the EGM) or from September 22nd, 2010 to October 22nd, 2010 (both dates inclusive), from 10 a.m. to 6 p.m. (Moscow time) at the following addresses:
- JSC RusHydro, 51 Arkhitektora Vlasova St., Moscow, Russia;
- JSC Moscow Central Depositary, 34 Bolshaya Pochtovaya St., Bldg.8, Moscow, Russia;
- on the Company's web site: www.rushydro.ru
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The Board of Directors has recommended that the Extraordinary General Meeting of the Company's shareholders decide to increase the Company's authorized capital by placing ordinary registered shares in the amount of 1,860,000,000 shares.
- The follow-on placement of shares will take place via public offering;
- The offering price (including the offering to individuals who have the pre-emptive right to purchase placed shares) will be set by the Company's Board of Directors in compliance with Articles 36 and 77 of the Russian Federal Law "On Joint Stock Companies;"
- Purchased shares must be paid for with monetary funds;
- The procedure for share purchase: payment is made upon the full placement of shares.
- The purpose of the issue is to raise budgetary funds to finance restoration of the Company's Baksanskaya HPP.
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The Board of Directors has determined the value of property assigned to the State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)' as a collateral deposit to ensure the fulfillment of mutual obligations stipulated in loan agreements between OJSC Boguchanskaya HPP and Vnesheconombank, as well as between CJSC BoAZ and Vnesheconombank.
In addition, the Board of Directors has set the price of the loan obligation of OJSC Boguchanskaya HPP to Vnesheconombank, under which JSC RusHydro acts as the guarantor.
In accordance with conditions of the BEMO project financing approved July 28th , 2010 by the Supervisory Board of Vnesheconombank, to ensure the fulfillment of loan obligations of OJSC Boguchanskaya HPP and CJSC BoAZ, the Company will act as the guarantor of loan obligation between OJSC Boguchanskaya HPP and Vnesheconombank. The Company will also hand over its shares of CJSC "Customer of Boguchanskaya HPP Construction," CJSC "General Contractor of Boguchanskaya HPP Construction" and CJSC "Customer of the Boguchansky Aluminium Smelter Construction" and its promissory notes for OJSC Boguchanskaya HPP and CJSC BoAZ.
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The Board of Directors has recommended that the Extraordinary General Meeting of the Company's shareholders approve the conclusion of deposit and guaranty agreements between the Company and Vnesheconombank which have been identified as being interested party transactions.
In accordance with Article 83 of the Russian Federal Law "On Joint Stock Companies," the agreements for shares and promissory notes deposit, as well as the guaranty, concluded between the Company and Vnesheconombank, will be deemed to be transactions of interest to A.B. Ballo, a member of the Company's Board of Directors who simultaneously serves as a member of the Executive Board of Vnesheconombank.
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The Board of Directors has approved providing shares of CJSC "General Contractor of Boguchanskaya HPP Construction," CJSC "Customer of Boguchanskaya HPP Construction," CJSC "General Contractor of the Boguchansky Aluminium Smelter Construction," CJSC "Customer of the Boguchansky Aluminium Smelter Construction," belonging to the Company, to Vnesheconombank as security for the performance of inter-related obligations under the credit agreement between OJSC Boguchanskaya HPP and Vnesheconombank, as well as between CJSC BoAZ and Vnesheconombank.
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