Chubais's first money

The placement of OGK-5 shares brought the energy sector almost half a billion dollars

The first IPO of a wholesale generating company created during the reform of the electric power industry took place: as the head of RAO UES of Russia Anatoly Chubais said, yesterday night the placement of an additional issue of shares of OGK-5 (16.8% of the authorized capital) was completed, which resulted in “a direct attracting private investment in the Russian energy sector in the amount of $459 million.”

“The volume of investments that we have attracted is greater than the average annual volume of investments in the energy sector of budgets of all levels in recent decades,” said the head of the energy monopoly. As a result of the placement of the new issue, RAO's share in OGK-5 is reduced from 87.7 to 75.03%. According to the head of RAO, about 5% of the shares of OGK will now be owned by strategic investors (including, as it turned out yesterday, the European Bank for Reconstruction and Development and the Finnish concern Fortum), but as a result of the IPO, none of the participants will receive more than 1.1% of the shares companies. Thus, strategic investors were not allowed to obtain a more or less large stake in OGK-5 (for example, Gazprombank, as reported, submitted an application for the entire volume of the additional issue), but portfolio investors received a new tool for speculation on the stock market in anticipation of the sale of a blocking stake in this wholesale generating company.

OGK-5 was created as the very first among wholesale generating companies, and it is for this reason that it was the first to be ready for an IPO - the main way, according to Mr. Chubais’s plans, of attracting investment in the electric power industry. This company united Konakovskaya, Nevinnomysskaya, Reftinskaya and Sredneuralskaya GRES with a total installed capacity of 8.67 thousand MW. Until now, the relatively large minority shareholders of OGK-5 were the structures of the famous greenmailer Kenneth Dart and former member of the board of directors of RAO, head of Halcyon Advisors David Hern, who now heads the strategy committee under the board of directors of the energy holding.

The placement took place at a price of 9 cents per share - it was approved yesterday by the Board of Directors of OGK-5. Prior to this, a price range of 7.6-9.5 cents per paper was approved. As Mr. Chubais said, “if we start from the maximum price, then the excess demand of investors exceeded supply by 8.6 times, if we start from the minimum price of the range, then demand exceeded supply by 10 times.” As a result of the additional issue, the company's capitalization, according to him, will increase to $2.8 billion.

OGK-5 plans to spend the money from the placement of an additional share issue to finance a five-year investment program worth more than $1 billion, within the framework of which, as OGK-5 CEO Anatoly Bushin said yesterday, it is planned to build 1,200 MW of new capacity. In particular, funds from the IPO will be used to finance the construction of a combined cycle gas plant with a capacity of 420 MW at the Sredneuralskaya State District Power Plant and the installation of 412 MW at a new site in the Moscow region. The company estimates their value at 22 billion rubles. OGK-5 intends to borrow the missing amount of funds.

Mr. Chubais did not name the new owners of OGK-5, but indicated that “among the investors are the largest and most reputable energy companies in Europe, international banks, institutional investors, the largest Russian energy and financial companies, and banks.” “In general, we can say that the composition of new shareholders that we managed to attract is not just high quality, but super high quality,” he said. However, after some time, buyers of OGK-5 shares began to make themselves known. The first to react was the EBRD, which in its message expressed the hope that its participation in the IPO of OGK-5 “will simplify the further attraction of strategic private investors into the industry.” Then Fortum admitted to the purchase. “Despite the fact that the North-West region of Russia remains a priority development direction for Fortum (the concern owns the assets necessary for the blocking shareholder of Territorial Generating Company No. 1. - Ed. ), the company’s management is also considering other opportunities for investment in the Russian electric power industry,” - - he explained his actions. Market sources also indicated yesterday that Gazprombank and Vnesheconombank were noticed among the buyers of OGK-5 securities.

Over the next six months, RAO UES will not be able to make transactions with OGK-5 shares. Then, as has already been reported, it is planned to sell a blocking stake in the company, provided that RAO remains the controlling shareholder. Vremya Novostei's source in the government is confident that the buyer will one way or another be Gazprom's structure. Mr. Chubais, apparently, is against this. “In our deep conviction, the freer, more transparent and more open the future market will be when selling a blocking stake in OGK-5, the better for OGK-5 and for the Russian energy sector in general,” he said the other day. And yesterday he reminded reporters that RAO's investment program for the construction of new energy capacities is estimated at $81 billion. From which it follows that he is interested in selling shares as expensive as possible, and this can only be done on the stock exchange, and by selling in small portions. The head of RAO has not been talking about selling large stakes in energy enterprises to strategic investors for almost a month now.

Nikolay GORELOV