Rosseti to be merged with subsidiary Federal Grid Company
MOSCOW. July 18 (Interfax) - Russia's Federal Grid Company UES (FGC) will take over parent company PJSC Rosseti , both companies said.
A decision has been made on the reorganization of Rosseti in the form of a merger into FGC, Rosseti said in a statement.
Along with Rosseti, Far East Energy Management Company - ENES (DVEUK-ENES), Tomsk Trunk Grids and Kuban Trunk Grids will also be merged into FGC, the latter said in a statement.
The merger will be carried out with a new issue of shares in FGC, which manages Russia's backbone grids, according to a disclosure of material facts. However, the reorganized group will still be headed by Rosseti CEO Andrei Ryumin. At present, Rosseti is the management organization for FGC.
The buyback price for shareholders opposed to the reorganization of Rosseti will be 0.6058 rubles per common share and 1.273 rubles per preferred share. The buyback price for FGC shares will be 9.04 kopecks.
FGC will hold an extraordinary general meeting on this issue on September 14 and Rosseti will hold one on September 16; the registries for these meetings will close on August 17 and 19, respectively.
Ryumin met with President Vladimir Putin not long before the announcement of the merger of Rosseti into FGC, which was a surprise for the market. Corporate relations were not discussed in the open portion of the talks. There have been rumors about new shareholder structures in the grid sector for many years, but they had not been active recently.
Rosseti has not yet responded to questions from Interfax.
Rosseti is Russia's largest power grid company and includes backbone grids, and interregional and regional distribution grid companies.
FGC owns and operates the power grids of the Unified Energy System of Russia. Rosseti owns 80.13% of FGC. Rosseti, in turn, is 88.04% owned by the state and 1.28% by Gazprom Finance B.V.
Kuban Trunk Grids and Tomsk Trunk Grids are subsidiaries of FGC, which owns, respectively, 100% and 90.48% of these companies.
DVEUK-ENES is wholly owned by the Federal Property Agency. Previously, DVEUK's assets were split between FGC and RusHydro and DVEUK was split into two companies, DVEUK-ENES and DVEUK-GeneratsiyaSeti. At the beginning of July, RusHydro shareholders approved a new issue of 10 billion common shares to the Russian Federation totalling 10 billion rubles to acquire DVEUK- GeneratsiyaSeti and Sakhalin Energy Company.
