"We are about to strike the largest investment deal in the history of the electricity sector in Russia and the Soviet Union," Anatoly Chubais said.
Chubais said UES [RTS: EESR] could sell 60.8% of state-owned shares within its 89.6% stake in OGK-4, a wholesale generating company, to German energy giant E.ON for 100 billion rubles ($3.9 billion).
At an auction on Friday E.ON offered the highest price - 3.4 rubles ($0.1) - for an ordinary share in OGK-4, and was announced the auction's winner. Earlier on Saturday the company's board fixed the price as the offering price for its subsidiary's additional issue.
The funds raised from the flotation of OGK-4's new shares will be used on investment projects until 2011. In particular, new power units for four hydro power plants will be built.
After the flotation and sale of the stake to E.ON UES will retain at least 22.5% in OGK-4. The company's capitalization is currently $5.9 billion. Until 2011 UES will commission 2,400MW of new electricity facilities.
The electricity monopoly says on its Web site that its reorganization will be the logical completion of the electricity sector restructuring and the formation of the industry's new demonopolized structure. After the reform, UES will cease to exist as a "state-owned monopoly" and will be transformed into several state-owned and private companies.
