OREANDA-NEWS. Alfa-Bank arranged yesterday’s public auction to sell a 25,03% RAO UES of Russia stake in OGK-5. Under current Russian Federation legislation, and according to the resolution of the Board of RAO UES of Russia of 9 February 2007, Alfa-Bank acted as the company’s Accredited Agent and together with Merrill Lynch as a financial adviser. Bids were made between 2 April and 28 May 2007.

The auction trigger price equalled the fair market value of 24,658 billion roubles (954 million US dollars) as determined by an independent valuation. The bid increment was 200 million roubles (7,7 million US dollars), with the first increment reaching 342 million roubles (13,2 million US dollars).

Among those interested in the auction were both Russian and foreign strategic investors, including E. ON Russia Power GmbH, Enel Investment Holding B. V., Rusal Energy Limited and NOVATEK.

Enel Investment Holding B. V. was the winner of the auction with a bid of 39,2 billion roubles (1,52 billion US dollars). The auction price was almost 60% above the initial price.

"This deal is one of the first examples of the sale of Russian power generating assets to a foreign strategic investor. Prior to the deal, the only foreign company that owned a majority stake in a Russian generating company (TGK-1) was Fortum, a Finnish company. We believe that the presence of an energy company as big as Enel among other OGK-5 shareholders will contribute significantly to the development of OGK-5. We view this news as very positive for RAO UES, but also for shares in other OGKs and TGKs, because it confirms the huge interest strategic investors have in Russian generating companies, and their readiness to pay substantial premiums over current prices", remarked Alexander Kornilov, senior energy analyst at Alfa-Bank.

"A considerable part of this success can be attributed to the management team’s professionalism, which not only allowed for the arrangement of a transparent and effective sale in short time, but also contributed to OGK-5’s investment appeal for strategic investors", said Rafael Nagapetiants, Managing Director, Head of the Corporate Finance Department at Alfa-Bank.