OREANDA-NEWS. On May 22, 2007 RAO "UES of Russia" held an auction to sell its 49 percent stakes in OAO "Nizhny Novgorod Retail Company", OAO "Sverdlovenergosbyt", OAO "Kuzbass Energy Retail Company", and 100 percent stake in OAO "Orenburgenergosbyt". Bids for the auction were accepted between 16 April and 21 May 2007, reported the press-centre of RAO "UES of Russia".
The public auction was arranged by OAO "Urals Energy Management Company", an Accredited Agent of RAO "UES of Russia", pursuant to the applicable Russian laws, resolution of the Board of Directors of RAO "UES of Russia" of 9 February 2007*, and the resolution of the Procurement Commission of the Project Center for Pre-sale Preparation and Disposal of Assets of RAO "UES of Russia" of 23 March 2007.
The auction reserve prices for the share holdings in OAO "Nizhny Novgorod Retail Company" (equal to the fair market value determined by a consortium of independent appraisers), OAO "Sverdlovenergosbyt", OAO "Orenburgenergosbyt", and OAO "Kuzbass Energy Retail Company" were RUB750 million, RUB1,150 million, RUB1,100 million, and RUB1,400 million, respectively. The price increment was RUB25 million.
The auction had 7 participants, both Russian and foreign companies.
Auction Results:
The auction to sell the 49 percent stake in OAO "Sverdlovenergosbyt" was won by OOO "Center Region Invest", which offered RUB1,150 million for the shares.
The auction to sell the 49 percent stake in OAO "Nizhny Novgorod Retail Company" was won by OOO "Transneftservis S", which offered the highest price for the shares, RUB2,050 million. The auction price was nearly three times higher than the reserve price.
The auction to sell the 100 percent stake in OAO "Orenburgenergosbyt" was won by OOO "Center Region Invest", which offered RUB1,110 million for the shareholding.
The auction to sell the 49 percent stake in OAO "Kuzbass Energy Retail Company" was won by OOO "Mechel-Energo", which offered RUB1,140 million for the shares.
Upon the completion of the auction, RAO "UES of Russia" and the auction winners signed auction minutes and the Share Purchase Agreements in respect of the shares in the energy retail companies held by RAO "UES of Russia".
* At its meeting held on 9 February 2007, the Board of Directors of RAO "UES of Russia" approved the sale through public auctions the Company's shares in 8 energy retail companies (ERCs), including OAO "Kuban Energy Retail Company", OAO "Nizhny Novgorod Retail Company", OAO "Sverdlovenergosbyt", OAO "Kuzbass Energy Retail Company", and "Orenburgenergosbyt".
The Board of Directors RAO "UES of Russia" took a decision in principle divest its holdings in ERCs on 8 December 2006. It is planned that the energy retail companies will be divested before RAO UES reorganization in 2008. According to the Board resolution, the principal method to be used for the disposal of the ERCs will be sale through a public auction with the reserve price not lower than the fair market value determined by an independent appraiser.
The ERC sale will significantly increase the number of independent energy retailers employing advanced methods of retailing, expand the range and improve the quality of services provided by them owing to the growing market competition among the retailers.