Taking into account the exercise of its pre-emptive right, KES Holding will acquire 325.7 billion additional shares, which makes 26.5% of the authorized capital of TGC-5, the company said.
TGC-5 is being divested by RAO UES in a number of segments, as part of the Russian utility’s reorganization plan. If TGC-5’s entire share issue is sold at the price set by its board, the issue proceeds will amount to RUB11.6 billion, or $435 million.
The existing shareholders of TGC-5 purchased 69.2 billion shares under the pre-emptive right, which makes 20.99% of the total number of shares on offer. As RAO UES waived its pre-emptive right to acquire the TGC-5 shares, its stake in the company after the offering will decline to 47.45% from 64.83%.
TGC-5 said that it will use the proceeds from the new share offering to finance key projects to build combined-cycle power units at a number of its combined heat and power plants across Russia with a combined capacity of 400MW.
The company will also upgrade the power plants’ primary equipment in order to improve the efficiency of burning solid fuels.
Within three months of the new share issue, RAO UES and KES-Holding will sign an investment agreement which will govern the management issues relating to the implementation of TGC-5’s investment program. TGC-5 will eventually become a private generation company, with the state holding a blocking stake.
