RusHydro Placed 29.7% of Additional Share Issue

OREANDA-NEWS. November 9, 2011. JSC RusHydro (ticker symbol: RTS, MICEX, LSE: HYDR; OTCQX: RSHYY) announces the preliminary results of the placement of additional share issue following the execution of pre-emptive right to acquire newly issued shares by its shareholders.

Overall, RusHydro placed 26,426,831,049 additional shares, or 29.7% of the total volume of additional issue (89,000,000,000 shares with a par value of RUR 1) to its shareholders, who had exercised their right of pre-emptive acquisition.

Shareholders of RusHydro as at May 23, 2011 could participate in pre-emptive share acquisition from August 29 to October 28, 2011. During this period shareholders could submit their applications to buy of additional shares pro rata their equity holding in the the Company and pay for shares both with cash or non-cash assets (see below), whose cash value had been previously approved by the Board of Directors. As a result of pre-emptive right execution, shares of the following companies were acquired by RusHydro:

The controlling shareholder of RusHydro - the Russian Federation - also contributed the property of dams of Bratskaya, Ust'-Ilimskaya and Irkutskaya hydropower plants located on the river Angara as payment for shares of the additional issue:

- right-bank dam of the Bratskaya HPP;

- left-bank dam of the Bratskaya HPP;

- dam of the Ust-Ilimskaya HPP;

- right-bank dam of the Irkutskaya HPP;

- left-bank dam of the Irkutskaya HPP.

The total amount of cash assets contributed as payment for shares of additional issue comprised RUR 3.168 bln rubles, of which RUR 3.133 bln - funds from the federal budget earmarked for completion of Gotsatlinskaya HPP included in RusHydro's investment program.

Apart from the Russian Federation, more than one hundred shareholders - corporates and individual persons, including holders of depositary receipts for shares of RusHydro - exercised their pre-emptive rights. The total value of the contributed assets amounted to RUR 43.613 bln.

Thus, the first stage of the placement is now complete. As a result, RusHydro consolidated a number of energy assets and became the controlling shareholder of the RAO ES of the East Group and the dominant player in the power sector of the Far East of Russia. This acquisition is fully inline with the development strategy of RusHydro to consolidate undervalued generating assets in Russia to create additional shareholder value through realization of synergies with existing generating, retail, engineering and R&D assets of RusHydro Group. The strategy of RusHydro on development of the Far Eastern power sector shall include substitution of economically inefficient thermal plants with efficient low-cost generation, conclusion of bilateral power-purchasing agreements with consumers both for existing capacities and generation assets under construction, realization of opportunities of electricity export to neighboring countries and carrying out of investment projects using instruments of private-public partnerships and project financing.

The start of the second stage of placement - through open subscription to shares - will be determined after completion of all the procedures of the first stage.

On June 30, 2011, the AGM of RusHydro passed a resolution to increase RusHydro's authorized capital by issuing 89,000,000,000 additional ordinary shares with a par value of RUR 1 each. Monetary value of the property transferred to pay for additional shares of RusHydro was determined by an independent appraiser- LLC Institute for Enterprise Issues (the City of Saint Petersburg). In addition, JPMorgan and Morgan Stanley presented their fairness opinions to the Board.  The valuations as well as the offering price of shares of in the amount of RUR 1.65 per share were approved by the Board of Directors of RusHydro.