Translated material
frosty light
Mosenergo can force RAO UES to sacrifice principles
The management of Mosenergo (this brand is carried by Territorial Generating Company No. 3) yesterday summed up the results of the winter, which brought the capital to the brink of an energy crisis. The company’s general director, Anatoly Kopsov, pointed out that more widespread restrictions in energy supply during the period of severe frosts were avoided primarily because last summer the power engineers were able to develop several electrical circuits that made it possible to increase the power supplied to the network by 630 MW. This work will continue this summer, and Mr. Kopsov promises to increase capacity by another 150-200 MW by optimizing the schemes. At the same time, about 100 MW of new capacity will be commissioned during the year. But in any case, he admitted, “this is far from enough.”The deficit in the Moscow energy system this winter, according to Mr. Kopsov, was about 4,000 MW, and to compensate for it, 3,000 MW was attracted from outside. By next winter, consumption will only increase. Therefore, the company’s agenda includes large-scale construction of new power units and network equipment, which will no longer require 47 billion rubles in the next five years. investments, as recorded in Mosenergo’s investment plans, but 63 billion. At the same time, Mr. Kopsov, answering a question from Vremya Novostey, said that the majority of investors with whom the company held negotiations are not in favor of an additional issue of Mosenergo shares. (the money from its placement would be used for investments), but for the creation of “subsidiaries” on the basis of facilities under construction and an additional issue of their shares. In other words, investors consider the proposal of RAO UES of Russia to invest in the construction of capacities by “eroding” the shares of existing shareholders of generating companies less attractive. This divergence of interests may lead to the fact that the construction of new power units in the capital will be significantly delayed with all the ensuing consequences in the field of energy supply to consumers.
Among the priority construction projects of Mosenergo are the third and fourth blocks of CHPP-27, the eighth block of CHPP-26 and the eleventh block of CHPP-21. Construction of two units has already begun; this year the company promises to hold a “major international tender for the turnkey construction” of the eighth unit of CHPP-26, construction of the fourth unit of CHPP-27 is planned to begin next year. Mr. Kopsov says that over the past few months there have been changes in completion plans - three of these four units are planned to be commissioned a year earlier than planned, for example, the third unit of TPP-27 - already at the end of next year. First of all, the shift in deadlines forces the energy company to increase the size of the investment program. In particular, this year, Mr. Kopsov said, not 9.5 billion rubles will be invested, but 2.2-3.5 billion rubles. more. In addition, he says, the generating company included in the work plan at CHPP-26 the construction of a 500 kV transformer, since last winter revealed a significant overload of networks in the south of Moscow.
Mr. Kopsov claims that the investment program for this year will be financed half by depreciation and profit, the rest by loans. However, next year a larger scale of work is planned, because by 2010 it is necessary to commission at least 4,000 MW of new capacity. And it will be difficult to increase Mosenergo’s debt. That is why there was talk of creating “subsidiary” companies on the basis of the power units under construction, which would attract investors. Already this year, says the general director of Mosenergo, it is planned to create three such structures at the thermal power plant, where construction has begun. “They (“subsidiaries.” - Ed. ) arouse great interest among investors - approximately two-thirds of investors focus on them,” says Mr. Kopsov. “It’s clear why: these are separate objects, not burdened with debts, not burdened with any economic ties, etc.” True, in order to create such “subsidiaries” and carry out an additional issue of shares, the approval of the board of directors of RAO UES, where the majority is representatives of the state, and the board of directors of Mosenergo, in which the decisive vote belongs to RAO managers, is necessary.
Another way to attract investment is to issue additional shares of TGK-3 itself. This option across the entire Russian electric power industry is being lobbied by the management of RAO UES, headed by Anatoly Chubais. The mechanism is similar: an additional issue of shares is placed on the market, the money is directed strictly to investment projects. However, it is more complex from a corporate point of view. Firstly, the consent of the board of directors of RAO is also required. Secondly, government consent is required. And thirdly, it is necessary to hold a meeting of Mosenergo shareholders. And the ownership structure of Mosenergo is as follows: 50.8% of the shares belong to RAO, about 30% to Gazprombank, about 8% to the Moscow Government. It is clear that as a result of the additional issue the share of each of the shareholders will be “diluted”. At the same time, risks arise: for RAO - the loss of a controlling stake (after all, it declares that it is interested in third-party investments); for Gazprom, which controls Gazprombank, - the possible loss of a blocking stake in Mosenergo and the potential admission of its competitors to the capital's generation foreign markets (the same German concern E.ON and Italian Enel, with which Mr. Kopsov, by his admission, is already conducting preliminary negotiations on investments).
Mosenergo's top management, says the company's general director, works in both directions to attract investment. Answering a question from Vremya Novostey about why no one path has yet been chosen, Mr. Kopsov said that there are risks of non-acceptance of any of the options by shareholders. Therefore, for now the company plans to raise $700-750 million each from the placement of shares in Mosenergo and subsidiaries created on the basis of power units under construction. However, Mr. Kopsov does not exclude in advance the option in which all the $1.5 billion needed in the next five years will be raised through the placement of shares in Mosenergo subsidiaries.
Gazprombank yesterday chose not to comment on this topic. A source close to Gazprom told Vremya Novostey that there is no fundamental rejection of any of the options for attracting investments, since so far we are not talking about specific calculations and terms of emissions. The Moscow government was unable to obtain a comment on this topic yesterday.
Mr. Kopsov believes that if we talk about Mosenergo’s IPO, the ideal option would be an offering in February-March next year. To do this, it is necessary for the board of directors of RAO to approve it in May-June of this year. And, as Mr. Chubais promised Mr. Kopsov, this issue will be included in the agenda of the May meeting of RAO directors. At the same time, the government has not yet decided on its position, although it should have done this, as the head of the Ministry of Industry and Energy Viktor Khristenko said, before March 15 (this was Vladimir Putin’s order). And judging by the changes in the timing of the commissioning of new Mosenergo capacities, the Moscow government is very persistently rushing the energy workers. It is clear that neither Mayor Yuri Luzhkov nor the management of the capital’s energy company are interested in an additional issue of Mosenergo shares due to the lengthy approval process at all stages of government power and due to obvious conflicts of interest of the company’s shareholders. But if RAO allows, even as an exception in Moscow, not to carry out an additional issue of Mosenergo shares, then Anatoly Chubais’s latest idea to attract large-scale investments will fail. RAO says that they consider both options for attracting investments to be equivalent, however, the interlocutor of Vremya Novostey said, “the option of additional issues of shares of large generating companies has been worked out to a greater extent.”
The confrontation between the parties will obviously appear at the next meeting of the board of directors of RAO on April 21 - the agenda includes the issue “On proposals for the issue of additional shares of subsidiaries and affiliates in 2006-2008.”