Translated material
Sales sale
Directors of RAO UES decided to get rid of retail subsidiaries
The Board of Directors of RAO UES of Russia on Friday decided to sell at open auctions almost all regional sales companies owned by the energy holding. However, it is obvious that only existing large players in the energy market who are ready to work with the population will become buyers.According to a RAO representative, the meeting of the board of directors did not discuss the issue of how the proceeds from the sale would be distributed - rather, this would be determined on a case-by-case basis. But the initial price, as stated in the decision made by the directors, must be no lower than that determined by an independent appraiser, and when approving it, it is necessary to focus on the experience of similar sales.
The Board of Directors of RAO was inspired by the idea of selling sales companies after a summer auction, when about 47.36% of the authorized capital (almost 60% of voting shares) of the Yaroslavl Sales Company (YSK) was purchased by Transneftservice S for $15 million - price , 2.5 times higher than the initial one. And before that, for $105 million, Italian Enel bought 49% of Rusenergosbyt from Grigory Berezkin’s structure, which is also not cheap. In addition, many large enterprises began to create their own energy sales companies in order to work in the electricity market; there are already 40 of them. In this situation, it is quite logical to expect that competition in the retail electricity market will only increase, and it is far from a fact that sales companies controlled by RAO ( There are only 50 of them) they will withstand it.
As an experiment last summer, the board of directors of RAO tried to divide the energy supply companies it owned into several groups: some were given over to large generating companies for management for a year, others to regional authorities, others to independent companies, and others remained at the disposal of RAO. And only YASK was sold at an open auction. The results of this experiment were summed up last Friday. It was decided that sales would take place mainly in 2008 (before the liquidation of RAO as the parent company). In a month, the board must present a detailed sales schedule to the board of directors of RAO, with the first of them expected to take place in the first quarter of 2007. If they are successful, says a source close to the board of directors, the schedule will be adjusted to speed up the process.
The sales business is interesting primarily because it is at the top of the financial flow in the electric power industry. It is this circumstance that forces private investors in the industry to begin expansion into the electric power industry from the retail market. Subsequently, it is obvious that it will be the sales owners who will be the main contenders for the wholesale and territorial generating companies (WGCs and TGCs). In particular, the head of Rusenergosbyt, Mikhail Andronov, told Vremya Novostei. According to him, the volume of his company’s contracts is already comparable to the output of one OGK, so it would be logical for him, as an investor, to acquire OGK and achieve synergy in the business. As is known, Gazprom adheres to a similar position: it is already creating its own sales company within the structure of Mezhregiongaz (which, apparently, will include its stake in Mosenergosbyt), and at the same time buying shares in generating companies -- “ Mosenergo, OGK-5, etc.
At the same time, energy sales companies independent of RAO are selecting consumers from structures controlled by the energy holding. In the conditions of cross-subsidization that has not yet been eliminated (when tariffs for industry are higher than tariffs for the population and agricultural enterprises), such competition makes the business of sales companies owned by RAO less profitable. In particular, as Samaraenergo says, the departure of one AvtoVAZ will cost it about 10% of its profit. “An increase in the level of consumer churn can only be caused by a significant increase in competition in the market,” says the JSC report for the third quarter of this year. “Potentially, consumer loyalty in a highly competitive environment is low, but a sharp surge in outflows is not predicted in the near future due to the significant costs that a consumer may incur when switching to the energy supply of a competing energy supply company.” In this case, the company can only “use a structured marketing policy based on a thorough analysis of the demand, interests and capabilities of energy consumers, introduce new types of services and reduce the sales premium (obtained from activities in the unregulated sector).”
However, they say on the energy market that many of RAO's sales subsidiaries are most likely already "prepared" for sale: they have already lost the most "tidbits" - large and reliable consumers who have switched to servicing private sales companies considered controlled some members of the energy holding board. And the sales outlets owned by RAO were left with small and scattered consumers, primarily the population. And it is service to the population that, apparently, will become the main subject of struggle during auctions - after all, current market participants, that is, large structures, will most likely compete in them. After all, as Mr. Andronov says, RAO Energy Sales “has a huge customer base - the population, and the greater the volumes on the market, the greater the volume of business, the lower the price of purchasing energy can be.” At the same time, the population, as a rule, regularly pays for electricity. In addition, having an extensive client base, Mr. Andronov continues, it is possible to introduce complex services while applying an individual approach - this is something similar to the cellular business.
However, theoretically, not all future buyers of energy sales may be interested in working with the population. In this case, according to the rules, they must announce three months in advance that they are renouncing the “supplier of last resort” status (that is, a company that does not have the right to refuse to enter into an energy supply agreement with the consumer, for this it receives a sales guarantee and a sales premium when working in a regulated region). market sector) and, at its own expense, hold a competition for the right to obtain this status. If no one wants to participate in the competition, then in this case the regional network company becomes the “supplier of last resort.”
One way or another, experts believe that investments in the energy sales business are now quite attractive. Aton's analysis, published this summer after the sale of YSK, said: “The distribution segment remains one of the most undervalued in the electricity industry, since few investors understand what the business models of energy supply companies are now and what they will be in the future. Unfortunately, the liquidity of shares of companies in this segment is now extremely low, and the average capitalization of each supply company rarely exceeds $20 million.”