Analysts do not exclude the possibility of Forum and Interros entering a fight for control over TGC No. 1
The promotion of Severno-Zapadnaya TGC (TGC No. 1) will most likely be approved at the nearest meeting of the RAO UESR Board of Directors on October 29, 2004.
TGC No. 1 is supposed to incorporate the assets of Lenenergo, the largest energy system in the region, as well as Kolenergo and Karelenergo. Brokerkreditservis investment company analyst Alexander Kornilov thinks that it is mainly Lenenergo that will benefit from merging the generating assets into Severno-Zapadnaya TGC, primarily due to low costs of Kolenergo and Karelenergo’s electric power. The point is most of the above companies’ generating capacities are TPPs whose power resources are the cheapest. The TGC’s total generating capacity will be 6099 MW, with more than 50% coming from the TPPs. TGC No. 1 is undoubtedly an attractive asset to strategic investors, the analyst notes.
Besides, the Lenenergo largest shareholder is Finnish Fortum with a blocking minority ownership (30.3%), and Kolenergo's largest shareholder - Kolskaya GMK (Interros) - controls about 25% of the company’s stock. Taking this into account, A. Kornilov does not exclude that Interros and Fortum may enter a competition battle for control over the TGC. As of today, it is difficult to estimate their chances to win, the expert believes. On the one hand, the Lenenergo share will dominate the TGC, and Fortum will consequently acquire a significant portion of the joint company. However, Interros owns a small share of RAO UESR itself, which should be accounted for. All the more so, as the third company in the TGC – OAO Karelenergo – is a wholly-owned subsidiary of RAO UESR, the specialist reminds.
Prospekt investment company analysts point out that, initially, the breakdown of all the three AO-Energo shareholders’ equities in Severo-Zapadnaya TGC will result in RAO UESR owning, by estimate, 55.8% of the company, Kolskaya GMK – 5.6%, Fortum – 13%. Experts also stress that Severo-Zapadnaya TGC will be founded without any preferred stock, and the AO Energo (whose generating capacities will be included in TGC No. 1) preferred – common stock exchange rate is determined by the shareholders themselves. Prospekt analysts think that the market will be interested in the creation of TGC No. 1. According to Veles Kapital investment company analysts, the decision to create TGC No. 1 will make a positive effect on the RAO UESR and AO Energo stock market as it will designate active reforms going on in the industry.
The Lenenergo management estimates that the TGC capital will be in the vicinity of $1.2 bln, earnings may fetch $1.66 bln.; the total generating capacity, 6,087 MW.
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