Translated material
Generous investors
Gazprom and E.ON paid well for energy assets
At the end of the week, RAO UES of Russia actually sold two large energy generating companies - TGK-1 based in St. Petersburg , as well as OGK-4, some of whose power plants are located in gas production regions. The first, as expected, was bought by Gazprom practically without competition, and the second by its German partner, the E.ON concern . For the German concern, by the way, this is the first significant asset in Russia. But since OGK-4 has almost all gas power plants (the share of gas generation reaches 82%), the de facto energy business for the Germans will depend on Gazprom.“The reform of the electric power industry has entered the investment stage for which it was conceived,” Anatoly Chubais, head of the energy holding, said on Saturday. According to him, despite the problems in the global and Russian financial markets, applications for the acquisition, in particular, of OGK-4 shares were submitted by many well-known global energy companies. True, as Margarita Nagoga, head of RAO's media relations department, told Vremya Novostei, there were only two offers for OGK-4 shares, one of which was on behalf of E.ON, and she refused to say who the second was from (but market participants unanimously they talk about the Finnish Fortum). "They (foreign energy concerns. -- Ed. ) recognized the Russian energy sector as attractive for investment , they showed that they are ready to fight for shares in the Russian energy sector,” news agencies quote Mr. Chubais. At the same time, the head of RAO indicated that “he never set the task of selling all of Russia’s energy sector to foreign investors - this it would be wrong."
In fact, the “preponderance” of Russian companies still remains. On Friday, RAO opened envelopes with proposals from investors ready to buy blocking shares in TGK-1 and OGK-4 due to the state, as well as buy out additional shares of these companies. The best offer for the price of TGK-1 shares was made by the Russian Energy Projects company, which, according to RAO representatives, represents the interests of Gazprom, and the best offer for the price of OGK-4 shares was made by the Russian subsidiary of E.ON.
Gazprom, by and large, has already fulfilled the state task of expansion into the electric power industry: it established control over the capital's generating companies - Mosenergo and TGK-1 (which includes power plants in St. Petersburg, Leningrad, Karelian and Murmansk regions), and In this way, he controls the energy supply for gas production at the Shtokman field, which is strategic for the country in the Murmansk region. Therefore, everything that the concern will now buy in the electric power industry will be exclusively its own initiative, aimed primarily at supplying energy to specialized enterprises and regulating the fuel balance of power plants.
The German E.ON has long tried to become an investor in the Russian electric power industry. In the late 1990s and early 2000s, he tried to cooperate with Mosenergo and Tulaenergo, but things did not go beyond declarations. The Germans announced their desire to buy OGK-4 last year. But this summer, the conditions for the sale of shares in generating companies began to be criticized. The main complaint from all major investors - including E.ON - was one: it is impossible to demand impeccable execution of the investment programs of the purchased OGK or TGK, since they do not satisfy the interests of the private owner (the quality of their elaboration has already become the talk of the town) . Moreover, it is impossible to demand the supply of power from new power units built under such investment programs, and to collect a huge fine for non-delivery (as RAO suggests - in the amount of 25% of the cost of the entire investment program).
The head of E.ON, Wulf Bernotat, came to Moscow in early September and discussed his complaints about the bidding with Mr. Chubais and the head of the Ministry of Economic Development and Trade, German Gref. Following the negotiations, he stated: “We closely followed the process of preparation for the auction and expressed our appropriate comments, and the decisions of the board of directors of RAO UES indicate that much of this was taken into account by the Russian side... We talked about issues that require clarification, It was important for us to compare positions. Much has been clarified, and most of our considerations have been received positively. This is a purely consultation process. This is not about putting pressure on anyone. We understand perfectly well that the state launched this process, it determined the rules of the game, and the task of RAO UES is to implement this process.”
After this, as the head of one of the private Russian energy companies told Vremya Novostey, representatives of E.ON changed their minds about discussing with him the possibility of joint participation in the tender for OGK-4, although before Mr. Bernotat’s arrival they themselves came up with such a proposal.
And then it became clear that the sales conditions had really changed seriously. First of all, the text of the power supply agreement, which will be concluded between the generating company and the administrator of the trading system, as a Vremya Novostey source says, includes two important points. Firstly, it is allowed not to supply power (and therefore no penalty will be charged) if there is no need for it. And secondly, in the spring the board of directors of RAO will discuss the content of the contracts again and, based on the results, it will be possible to change the already signed contracts. “Therefore,” says the source, “it became clear that OGK-4 would go to E.ON, and no one began to participate in this further, except perhaps Fortum - he was previously promised OGK-4 for abandoning claims to TGK-1 , and the Finns still hoped for something.”
As a result, on Friday they sold shares in TGK-1 and OGK-4, which, as a result of the reorganization of RAO, would have been due to the state. In TGK-1, according to the decision of the board of directors of RAO, the winner of the auction will also receive an additional issue of shares in the company. If the current shareholders of TGK-1 exercise the right of first refusal in proportion to their current share in the company, then Gazprom will ultimately become the owner of 47% of the shares, spending 71.1 billion rubles on this. (almost $2.8 billion). “There will be no control, but it won’t be difficult to achieve,” Alexander Chikunov, chairman of the board of directors of TGK-1 and member of the board of RAO, told Interfax. After all, a fairly large volume of TGK-1 shares - more than 11% - is in free circulation on the market, and not all portfolio investors will want to take advantage of the preemptive right to buy out the additional issue of shares. In addition, Gazprom valued the company's shares at 3.5 kopecks, and on the market they are traded at 3.3 kopecks, so investors have a chance to make good money (by law, the new owner of a large block of shares must make an offer to the remaining shareholders for the same the price at which I bought the papers myself). In terms of per kilowatt of installed capacity, TGK-1 is valued at $646 per kW, but “if we take into account the company’s net debt, then at $710 per kilowatt,” Mr. Chikunov said. This is slightly higher than the price at which TGCs have been sold so far: Mosenergo went to Gazprom for about $500 per kW, and TGC-5 went to IES for the same price.
But with the shares of OGK-4, not everything is clear yet. So far, E.ON has been recognized as offering the highest price - about 100 billion rubles. - for the block of shares due to the state during the reorganization of RAO - this is about 47%. At the same time, the offer of the German concern stated its intention to purchase all shares from the additional issue, Ms. Nagoga said. Now the placement price will be set at the level proposed by E.ON - 3.35 rubles. per share. After current shareholders exercise their pre-emptive right, OGK-4 will decide to whom to sell the unredeemed shares. Since RAO owns 90% of the votes in this generating company, Ms. Nagoga says there is a high probability that the decision will be made in favor of E.ON. However, if another bidder appears willing to pay the same price, the decision will remain with the board of directors of OGK-4. And again, since RAO has 90% of this company, it is obvious that it is the energy holding that will put an end to this issue. In the meantime, Anatoly Chubais says that he “does not intend to split the stake” - that is, he wants to sell all the shares to one buyer. If it is E.ON, then it will receive more than 69% of the shares of OGK-4 for 146 billion rubles. ($5.7 billion).
At the same time, the price at which OGK-4 is sold to E.ON is very high - $753 per kW. This is a kind of record: OGK-5 was sold to Italian Enel for $670 per kW, and OGK-3 to Norilsk Nickel for $601 per kW.
“This is the largest investment deal in the entire history of Russian energy,” said Mr. Chubais, pointing out that 100 billion rubles. will be used to implement the investment programs of the Federal Grid Company and HydroOGK.
What prompted the Germans to pay so much for OGK-4 remains unknown. However, it is quite possible that this is part of a larger scheme for the exchange of energy assets between E.ON and Gazprom. As is known, negotiations on the entry of a German concern into the project for the development of the Yuzhno-Russkoye field in exchange for Gazprom’s access to E.ON enterprises in Hungary have somewhat stalled. According to the initial agreements, the Germans were to receive 25% minus one share in Severneftegaz (implementing a field development project), and Gazprom - 50% minus one share each in the Hungarian gas enterprises E.ON Foldgaz Storage and E.ON Foldgaz Trade , as well as 25% plus one share in the regional electricity and gas company E.ON Hungaria. However, Gazprom hinted to its partners that it was primarily interested in the markets of Germany and Great Britain. As experience suggests, foreigners are allowed to buy strategic assets in Russia only in exchange for the participation of Russian state-owned companies in foreign business projects. It is quite possible that part of the assets of OGK-4 will eventually go to Gazprom (previously it expressed interest in them) together with E.ON energy enterprises in Europe, and the Germans will finally be able to get a share in Yuzhno-Russkoye. However, Gazprom does not comment on this possibility.