07 August 2017, 23:42 / Business Exclusively by subscription

Deripaska made money out of water

Eurosibenergo brought dividends to a businessman for the first time - almost 6 billion rubles Ivan Peschinsky Angara energy brought Oleg Deripaska his first dividends / Vitaly Ankov / RIA Novosti / Vedomosti

brought Eurosibenergo At the end of 2016, its beneficiary Oleg Deripaska 5.9 billion rubles. dividends. These are the first payments in the company’s history, according to the SPARK-Interfax database. Eurosibenergo's revenue at the end of 2016 increased 3.2 times to 31.8 billion rubles, and net profit increased 33.7 times to 87.6 billion rubles.

Eurosibenergo includes two main energy assets - Irkutskenergo and Krasnoyarsk HPP. In total, the company owns 18 power plants with a total capacity of 19 GW, of which 15 GW are large hydroelectric power plants - Krasnoyarsk, Bratsk and Ust-Ilimsk. The main consumers of the energy company are the aluminum smelters of UC Rusal. Eurosibenergo is part of En+, of which Deripaska plans to sell up to 20% of its shares on the stock exchange (see inset).

Last year was eventful for Eurosibenergo. The company closed the largest deal in the history of Russian energy. Its 100% subsidiary, Telmamskaya HPP (recently renamed Eurosibenergo - Hydrogeneration) bought 40% of Irkutskenergo from Inter RAO for 70 billion rubles, twice the market price. The total share of the Eurosibenergo group in Irkutskenergo thus exceeded 90%. Only a year later, Telmamskaya HPP announced an offer to the remaining minority shareholders of Irkutskenergo at the weighted average price of the company's shares on the Moscow Exchange over the past six months.

Currently, the court is considering several claims from minority shareholders of Irkutskenergo. In the winter of 2016, the Irkutsk Arbitration Court ordered the Telmamskaya HPP to compensate minority shareholder Konstantin Alexandrov 607,500 rubles. Experts explained this by the fact that he did not demand a mandatory repurchase at the price of the deal with Inter RAO, but compensation for the difference between the price of a potential repurchase and the price at which he sold the shares on the market.

En+ is about to go public

En+ (controls Eurosibenergo) plans to hold an IPO in London: 20-25% of shares for $1.8-2 billion - this could become the largest placement of a Russian company since 2012. En+ plans to use part of the money from the sale of shares to pay off debts. It was expected that the placement could take place in the summer, but the possibility of selling shares in the fall is now being considered.

En+'s electricity business is relatively stable; the company will try to mobilize internal resources to service the debt incurred after purchases from Inter RAO and RusHydro, says Renaissance Capital analyst Vladimir Sklyar. Eurosibenergo has 1.4 billion rubles in its accounts, retained earnings from previous years amount to 24.4 billion rubles, and debt is 108.1 billion rubles, according to the company’s report. In addition to the deal with Inter RAO, Eurosibenergo also bought the dams of the Angarsk cascade of hydroelectric power stations from RusHydro for 11 billion rubles.

To generate a constant cash flow in order to reduce debt, the party to these transactions, Eurosibenergo - Hydrogeneration, must lease the Bratsk, Irkutsk and Ust-Ilimsk hydroelectric power stations of Irkutskenergo, recalls Sklyar. The issue of leasing these stations for 10 years will be considered by Irkutskenergo shareholders on August 25. The amount of lease payments will be 1.2 billion rubles, according to the company’s materials. As the debt burden decreases due to the absence of a significant investment program for Eurosibenergo, the amount of dividends may also increase, Sklyar expects.

Irkutskenergo's revenue in 2016 was 84.1 billion rubles, and net profit was 17 billion rubles. The company’s shareholders, as at the end of 2015, refused to pay dividends.

It is difficult to talk about whether Eurosibenergo will be able to pay dividends constantly, Sklyar believes: the heat generating assets of Irkutskenergo will sooner or later require significant investments in modernization. A significant increase in profits can only be expected in 2017 in light of the revision of contracts for the supply of electricity to UC Rusal , the analyst notes. It is likely that minimal dividends will be maintained in the future, but the lion's share of income will be spent on reducing the debt burden and modernization in the next 3-5 years, he expects.