MOSCOW, December 7 (RIA Novosti) - Unified Energy Systems [RTS: EESR] said Thursday it has decided to remove two companies from the holding in a reorganization effort.
UES chief executive Anatoly Chubais said an extraordinary meeting of the electricity monopoly's shareholders decided to make wholesale generating company No. 5 (WGC-5) and territorial generating company No. 5 (TGC-5) separate entities.
Russia's power sector has undergone radical changes in recent years aimed at increasing the efficiency of power plants and developing the industry by attracting investment. During the restructuring process, specialized structures have been created in place of the old vertically integrated companies.
Once reforms are complete, the potentially competitive sectors of the industry - generation, sales and repair companies - will become mainly private and will compete with one another. However, natural monopolies - power transmission and dispatching - will remain state-controlled.
The UES board of directors decided July 28, 2006 to restructure the holding in two stages.
During the first stage, slated for 2006-2007, UES will separate WGC-5 and TGC-5 and form WGC-5 Holding and TGC-5 Holding.
In the second stage, in 2007-2008, the UES parent company will be divided and its shareholders will receive the shares of core electricity entities (wholesale generating, territorial generating and federal grid companies) under UES current control, proportionate to their holdings in the monopoly's charter capital.
Chubais also said UES will propose to its shareholders that dividends not be paid in 2006.
"We will propose giving up dividend payment on both common and preferred stock, because similar decisions may be made on all classes of shares under legislation," Chubais said.
The UES chief executive said the profit documented after the holding's restructuring and the separation of its companies failed to correspond to real figures and, therefore, the monopoly's management will recommend that UES not pay dividends in 2006.
In 2005, Russia's electricity monopoly paid 2.36 billion rubles (about $82.4 million) in dividends on common shares, and 402.37 million rubles (about $14 million) in dividends on preferred stock.
Sergei Dubinin, a UES board member, said the electricity monopoly planned to issue additional shares of five generating companies in the first half of 2007.
UES could offer newly issued shares of WGC-3 at the end of the first and the beginning of the second quarter of 2007, Dubinin told a conference on RAO UES.
The materials prepared for Dubinin's speech suggest UES will offer an additional issue of Mosenergo (TGC-3) in March, TGC-5 in May and TGC-1 and WGC-4 in the summer of 2007.
Dubinin said UES decided to sell the shares of the Moscow electricity operator Mosenergo to a strategic investor, Russian energy giant Gazprom.
"For other companies, we'll attract both strategic and portfolio investors," Dubinin said.
Dmitry Akhanov, strategy department head of the UES reform control center, said the monopoly planned to sell 25.03% of WGC-5 to a strategic investor in May-June 2007.
"This will be done to attract a strategic investor and finance the investment deficit of the UES federal grid company," Akhanov said.
