Enel will compete with the Energy Holding Company for Control of the Generation Company Italy's Enel has taken another step towards strengthening its positions in WGC-5. The company intends to have six representatives sitting on the generation company's Board of Directors and has already made six nominations. RAO UES is also holding ground and has proposed ten nominees on its own and another one jointly with minority shareholder Westmead Ltd. It is clear that not all of them will make it to the Directors' Board since it consists of eleven members only. RAO UES plans to withdraw from the generation company's capital at the beginning of September. However analysts believe that the holding company has so far been trying to retain control of the company pro rata its share. As the WGC-5 press service reported yesterday, the Board of Directors had considered shareholders' nominations for the company's Board of Directors and the Auditing Commission. There are seven nominees for five seats on the Auditing Commission with RAO UES proposing five candidates and Enel Investment Holding B.V. and Westmead Ltd. proposing one candidate each. The report notes that the new Board of Directors and the Auditing Commission will be elected by an extraordinary shareholders' meeting of WGC-5 on 31 August. A representative of the generation company has told RBC Daily that it was majority shareholder RAO UES that initiated convocation of three extraordinary meetings. One of the meetings scheduled for 31 August will decide upon the Board of Directors while another one will take a decision upon the Auditing Commission. Stephan Zveginsov, head of Enel's Moscow representative office (nominated to the Board of Directors by Enel) has told RBC Daily that a decision to hold an extraordinary meeting was taken by mutual agreement of the shareholders. A source at the energy holding company has also reported that reelection of WGC-5's Board of Directors was a joint decision with Enel. Analysts believe that the shareholders will be represented in WGC-5's Directors Board pro rata their stakes. RAO UES owns 50%, Enel has 29.9% and Westmead Limited holds 3.75%", says Vasily Konuzin, Head of the Analytical Division of Alemar Investment Financial Corporation. He forecasts that "most likely the energy holding company will have eight representatives (one of them jointly with Westmead), while Enel will have to confine itself to three members". Ksenia Eliseeva of Otkrytie Financial Company is of the view that RAO UES of Russia and Enel will get seats in a proportion that roughly corresponds to their stakes in the generation company's authorized capital. Semen Birg of Finam Investment Company admits that the vote results may have already been foreclosed behind the scene. "Chances are that representatives of RAO UES will have no more than five seats on the company's Board of Directors and Enel will have three or four representatives". According to Semen Birg, if the Italians get four seats, it may suggest that they are beginning to show an aggressive interest for control of WGC-5 and that they have managed to come to terms with RAO UES. Experts call changing WGC-5's management inevitable, but so far each shareholder has been interested in participation in the Board of Directors. According to Mr. Konuzin, the competition is rather caused by Enel's desire to have as many as possible representatives in the company. RAO UES has so far retained its 50 percent stake in WGC-5, and the pilot withdrawal of the company from the holding company will serve to demonstrate success of the reform to investors. Experts believe it will be easier once there is a strong representative sitting on the Directors' Board. However, RAO UES notes that only five its nominees are employed by the energy holding company with the others being either independent directors or consultants. Experts find it difficult to predict who will represent Enel in the Board of Directors. Vasily Konuzin regards Head of the company's Russian representative office Stephan Zveginsov as the most likely representative of Enel. "A technical representative may also be elected since he may be useful for the company. This is Director of Enel's Steam and Gas Plants Operations Department Marcello Bruti", he says. |
