The RAO UES of Russia board of directors has approved an agreement with OJSC Norilsk Nickel Mining and Metallurgical Company which owns 3.5% of the authorised capital of the power holding company under which Norilsk Nickel undertakes a number of obligations related to the RAO UES reorganisation. This information is contained in the minutes of an absentee meeting of the RAO UES board of directors. In particular, Norilsk Nickel "voluntarily undertakes" to support additional share issues conducted by RAO UES subsidiary and dependent companies (SDC) in order to raise funds for investment projects. Norilsk Nickel undertakes to "vote and ensure that its representatives and affiliates vote in favour" at the general meeting of shareholders (meetings of the board of directors) of RAO UES and its SDC on issues related to additional share issues. Besides, Norilsk Nickel undertakes to maintain its interest in the RAO UES authorised capital (1,016,370,000 ordinary shares and 500 million preferred class A shares) until the moment of the state registration of OJSC Intergeneration (a special holding company to which shares in power companies due to Norilsk Nickel upon RAO UES reorganisation will be transferred). Under the agreement, Norilsk Nickel also voluntarily undertakes to support the terms and conditions of the reorganisation of RAO UES and its subsidiary and dependent companies. Similar agreements RAO UES has signed with its other large shareholders: Gazprom and SUEK. "In these cases, no approval of the board of directors was necessary," explained the power holding company. The agreement with Norilsk Nickel was a related-party transaction because the RAO UES board of directors includes Andrei Bugrov, managing director of CJSC Interros Holding Company, who is also a member of the Norilsk Nickel board of directors. In this connection, the agreement with Norilsk Nickel was considered at an absentee meeting of the RAO UES board of directors. The RAO UES reorganisation is conducted in two stages. The first stage will be finished in early September this year when OJSC Wholesale Generating Company No 5 (WGC-5) and OJSC Territorial Generating Company No 5 (TGC-5) are to be spun off from the holding company. The basic scheme of the second (and last) RAO UES reorganisation stage was approved at a meeting of the company's board of directors on 2 March 2007. It provides for the completion in 2007-08 of structural adjustments of the holding company's assets, the spinning off of all companies of the target structure of the industry (OJSC Federal Grid Company of the Unified Energy System, System Operator, WGCs and TGCs, etc.) from RAO UES, and the termination of the operations of the parent company OJSC RAO UES of Russia. The key basic principle of the final RAO UES reorganisation stage is the distribution of the RAO UES assets on a pro-rata basis between all shareholders of the holding company. This means that at the end of the reorganisation each RAO UES shareholder is to obtain as many shares in the target companies of the industry as to ensure that their market value is equivalent to that of the shareholder's interest in the RAO UES capital. |
