Italians now own 52.89% of WGC-5's shares The Italian company Enel has consolidated a controlling interest in the WGC-5 generation company. Preliminary results of the offer show that the company has managed to increase its stake by 15.74% having paid over RUR 24.65 billion. According to analysts, Enel owes this outcome to minority shareholders, who deemed it advantageous to leave WGC-5's equity in time of crisis. Prior to the offer, the company had owned 37.15% of WGC-5. Final results of the mandatory offer will be summed up in the nearest future. As Carlo Tamburi, head of Enel's international operations, said on Friday, the company expects its stake to grow to 60% following the results of the offer. According to Tambury, WGC-5's free float will reach about 10%. Judging by the offer's price, it cost the strategic investor over RUR 24.65 billion to bring its interest up to a controlling level. The company has not disclosed any information regarding the shareholders who submitted their shares for redemption. Gazprom which received about 5% of the generation company after WGC-5 had been split off from RAO UES of Russia, has not availed itself of the offer. According to Maria Frolova, a spokesperson for LLC Mezhregiongaz (a company dealing with the concern's energy projects), this package is to be contributed in a joint venture being set up with SUEK. Gazprombank sold 1.05% of WGC-5 for USD 57.2 million and reported this sale in its IFRS-based statements for the first half of 2007. The Board of Directors of Norilsk Nickel approved on 4 February the sale of the mining and metallurgical company's package in WGC-5 (1.7%) for USD 106 million. The Italian company faces no obstacles on its way to WGC-5 consolidation. The antimonopoly service has already issued its permission for Enel to buy 100% shares of the generation company. However, a blocking interest (26.4%) still remains with the state which was not able to take the offer. RAO UES CEO Anatoly Chubais has also sold his stake in WGC-5. According to the energy holding company's report for the third quarter of 2007, he owned 0.0039% of the authorized capital of the generation company. The fourth quarter report makes no mentioning of this stake. According to a source familiar with the preliminary results of the offer, Mr. Chubais sold his interest within the framework of Enel's offer. This interest cost the Italian company RUR 6.1 million. Other managers of RAO UES followed the example of their CEO. Analysts view the outcome of the offer as a success for the company. Experts have noted a serious purchasing campaign for WGC-5's securities in the market lately. "Enel was assisted by a fall in the domestic market", says Vasily Konuzin of Alemar Investment Financial Company. "Thanks to the offers, WGC-5 became a hedge against the market which was falling by 7% daily, and this made it possible for the company to actually remove the free float from the market." According to Konuzin, participants in the company's first placement fixed their profits: having bought the securities based on a USD 314 valuation of 1 kW of installed capacity, they received USD 695 under the offer. A controlling stake allows Enel to introduce serious changes in WGC-5's management. The most probable nominee for the position of the company's CEO is Dominique Fache, a member of the generation company's Board of Directors, Bloomberg reports. "At this stage it will be sufficient for Enel to behead the company by removing its most obvious opponent", believes Mr. Konuzin. "There will definitely be pinpoint replacements in the future". According to Mr. Konuzin, it is the economic section that will be strengthened first of all. The Italians intend to develop WGC-5 rapidly. The generation company's owner is ready to make investments in Russia while forming a vertically integrated company. According to Mr. Tamburi, Enel has spent EUR 3.5 billion on acquisitions in this country and will invest another EUR 2.5 billion in the nearest future. The company has gas production projects in Russia in co-operation with Gazprom or another partner, adds the top manager. The fuel will be delivered to WGC-5's plants in Siberia. |
