TGC-2 Plans more than a Two Times Capitalization Increase
OREANDA-NEWS. July 26, 2007. Public JSC "Territorial Generating Company #2" (TGC-2) plans to increase its capitalization from 32 bln. to 76 bln.rubles till 2011. This goal was announced by TGC-2 Deputy Director General for Development and Corporate Governance Valery Ermakov at the TGC-2 management team meeting with analysts from top Russian investment companies. The implementation of the plan will be assisted by a large-scale Investment Program. The amount of the Program"s funds till 2011, taking into consideration the updates, will constitute 38,5 bln.rubles. The largest part of this money will be allocated to replacement and modernization of obsolete and ineffective plants as well as to putting in operation new electric capacities.
JSC "TGC-2" First Deputy Director General for Production and Investment Vasiliy Beliy defined three main directions for the Investment Program implementation. First of all it is the most effective operation of current equipment in terms of production effectiveness and ensuring market competitiveness for plants, second is the introduction of modern steam-gas generating sets, significant change in fuel balance and placing main emphasis on coal.
In May of the current year TGC-2 Board of Directors approved the Development Strategy and the Investment Program for mid-term perspective. By 2011 TGC-2 intends to increase its installed electric capacity to 3262,5 MW, and by 2015 - to 6177, 5 MW, introducing in each of these periods 1145 MW and 4060 MW of new capacities accordingly. Parameters of the second stage in the Investment Program till 2015 will be approved by the Company"s Board later on. However, preliminary calculations show that Program funds amount will not be less than 110 bln.rubles.
TGC-2 First Deputy Director General for Economy and Finance Marina Kopyova named main financial sources for Investment Projects within the framework of the Company"s financial model: attracted funds (20%), own funds (21%), project financing (36%) and additional share issue (23%).
At the meeting with analysts Company"s management team have also voiced its plans to enter new heat markets, including 21 localities in regions of the Company presence, as well as the neighboring ones, in particular, Pskov region and Nenetsky free-standing region.
Senior analyst of "KIT Finance" bank Dmitry Tsaregorodtsev pointed out that TGC-2 originally not included in the list of companies to conduct additional share issue is rapidly transforming into one of the leaders. He considers the under way implementation of the Investment Program, which is thought through, well structured and specific, to be the main reason for such a change. Dmitry also pointed to a TGC-2 aggressive policy for increasing its heat market share.
Hence, TGC-2 team considers that the Program implementation will allow the Company to compete successfully on heat and electricity markets, increase its profitability and as a result to create a dynamic trend for Company"s development and capitalization growth.