The largest generating company in Russia, RusHydro, wrote off 9.4 billion rubles on bills that could be sold. Forbes writes about this with reference to unnamed sources.

The amount was written off against the bills of FC Otkrytie, which went to RusHydro and FSK from RAO UES. The latter invested part of the funds from five billion rubles received during the reform of the company in debt securities.

The energy holding, through the transfer of promissory notes to its subsidiaries, financed their investment programs. The former head of the corporate finance department of RAO Yulia Negasheva explained that the funds were transferred in such a way as not to approve cash tranches every time at the board of directors.

The bills are still on the balance sheets of FSK and RusHydro, but the debtor on these securities is not FC Otkritie. In 2009, Otkritie-Finance (the issuer) first changed its name to Energo-Finance, and RusHydro decided to exchange the Otkritie bills for Energo-Finance debt securities. At the same time, Rusenergo Fund vouched for the new debtor. The latter was previously called Otkritie UES Capital Partners and was purchased by the offshore Xerilda (81 percent) and the All-Russian Regional Development Bank (19 percent).

Subsequently, RRDB and Xerilda were bought out, including by Energo-Finance. As a result, as explained by the head of the National Rating Agency, Viktor Chetverikov, Otkritie is no longer a debtor on the mentioned securities, since the drawer was sold to a third party. In these transactions, RRDB actually acted in the interests of Rosneft, which owns almost 85 percent of its shares.

The value of the bills began to decline, and the net assets of Rusenergo Fund, the debtor’s guarantor, also fell. As a representative of RusHydro explained, this prompted the company to write off 9.4 billion rubles on bills.

An unnamed source of the publication close to Rusenergo Fund noted that the reasons for writing off the funds are unclear. According to him, at the end of 2012, according to market quotes, the fund was worth 30 billion rubles, and 80 percent of the fund was accounted for by liquid assets. Thus, the source summarized, the generating company could sell the promissory notes secured by assets.

The write-off of funds was one of the reasons for RusHydro's loss in the amount of 25.5 billion rubles at the end of 2012. The negative financial result was the first loss of the generating company since 2008. For comparison, in 2011 RusHydro earned 29.5 billion rubles. The company explained these results by the separation of sales companies and the abolition of government subsidies.

Forbes caught RusHydro illegally writing off nine billion rubles