04 February 2016, 23:42 / Business

Inter RAO can sell 2% of shares to management for 2.6 billion rubles

These are the preconditions for the third option program of the company Alina Fadeeva

This is the third option program of Inter RAO / S. Porter / Vedomosti

Inter RAO has developed a new option program for management, writes Renaissance Capital analyst Vladimir Sklyar in a review following a meeting with the company. It will be available to 45–49 top managers, including the chairman of the board of the company, Boris Kovalchuk. The program is designed for two years, after which time top managers will be able to buy back 2% of treasury shares at the average price six months before its approval, the analyst explains. Now it is 1.25 rubles. per share, he points out. At this price, 2% of Inter RAO shares are worth 2.6 billion rubles. In 2014, members of the board received 526.7 million rubles; data for 2015 is not yet available. Taking into account the recent growth of Inter RAO shares (they have grown by 80% over the past year), the option is already of interest to top managers, the analyst writes. Yesterday on the stock exchange, a 2% stake in Inter RAO was worth almost 3 billion rubles.

And reduce the people

On Wednesday, the All-Russian Electrical Trade Union sent an open letter to the Chairman of the Board of Inter RAO, Boris Kovalchuk, asking him to take action in connection with the layoff of workers at the company’s power plants. According to the organization, over the past 10 years, three stages of personnel optimization at stations included in Inter RAO have been carried out, as a result of which the number of employees was reduced by 40%.

A representative of Inter RAO does not comment on the details of the option program. According to him, the document has not yet been approved; it will be submitted to the next board of directors.

This is the company’s third option program - Inter RAO approved the first in 2008, putting 2% of shares up for sale, the second in 2011, offering managers 2.5% of shares. Many energy companies had option programs in the mid-2000s; in 2011, option programs were launched by RusHydro and the IDGC holding. As part of the latest program, Inter RAO top managers bought only about 0.01%, as follows from the Inter RAO message. Inter RAO Capital, which operated shares for the option program, reduced its stake in the company’s capital by 0.01%, while the shares of top managers Dmitry Palunin, Alexander Pakhomov and Karina Tsurkan increased. The new shareholders were board members Boris Kovalchuk and board members Alexander Boris, Ilnar Mirsiyapov, Valery Murgulets, Pavel Okley and Yuri Sharov. True, the managers greatly overpaid: the buyout price was 4.6 rubles. per share, and on the Moscow Exchange in June they cost an average of 1.2 rubles.

"Inter RAO"

Energy holding
Shareholders: Rosneftegaz (26.4%), Inter RAO Capital (18.9%), FSK (14%), UCP (9.6%).
Capitalization – 148 billion rubles.
Revenue (IFRS, 9 months of 2015) – 188.4 billion rubles.
Net profit – 3.7 billion rubles.

Now the Inter RAO management team has a better chance of making money, Sklyar believes. The adoption of the dividend program will definitely affect the quotes, he explains. Inter RAO has potential for further growth, primarily in the area of corporate governance, in particular the dividend program, agrees VTB Capital analyst Mikhail Rasstrigin. Whether it is implemented or not depends on the company itself, he adds. However, management’s position regarding dividends for 2015 is still unclear, Sklyar writes in the report. The company can pay 25-100% of net profit under IFRS, he notes. But Inter RAO is still not sure whether it will pay dividends from net profit under IFRS for 2015 or 2016, but 2016 is the absolute deadline, the analyst points out. For the first time in several years, Inter RAO paid dividends based on the results of 2014; they amounted to 25% of profit under RAS, or 108 million rubles.

Inter RAO's financial indicators will grow due to the commissioning of new power units under CSA (consumers pay a premium for them), as well as an increase in thermal tariffs, BKS and RMG analysts wrote in December following a meeting with the company's management. Consolidated EBITDA of Inter RAO will continue to grow and in 2021 may exceed 100 billion rubles, BCS noted. At the end of 2015, analysts expected EBITDA at RUB 70 billion. According to RMG's forecast, Inter RAO's EBITDA may exceed 100 billion rubles. already in 2018