Russia's TGC-1 has confirmed that it has completed all legal and corporate actions to effect the merger of Petersburg Generation Company, Kolskaya Generation Company, Karelenergogeneratsiya, and Apaptitskaya CHPP with and into TGC-1.
Before the merger, TGC-1 had operated using lease arrangements. The companies’ merger with TGC-1 was approved by the shareholder meetings of the regional generating companies (RGCs) and TGC-1, and the joint shareholder meeting of TGC-1 and the RGCs.
On November 1, 2006, the merged companies’ shares were converted into shares of the surviving entity, TGC-1, and all shareholders in the merged companies became TGC-1 shareholders.
In the future, shareholders in Murmanskaya CHPP will exchange their shares for additional shares in TGC-1 approved for issuance by TGC-1 shareholders in July. The share exchange is expected to take place in Q1 2007. After that, the target structure of TGC-1 will be finally formed, and Murmanskaya CHPP will become a TGC-1 subsidiary.
Consolidation of TGC-1 and its subsidiaries through share exchange means that the process to create the intended structure of the electricity sector has been completed by almost at all of the companies run by Business Unit 1 of RAO UES of Russia.
Alexander Chikunov, member of the management board and managing director of UES (Business Unit 1) said in a statement that the priority for the generation companies of his business unit would be to raise massive private investment and implement investment projects. Business Unit 1 will focus on improving operational efficiency and stepping up investments in its companies.
Also on November 1, 2006, official registration was granted to Yuzhno-Yakutskaya Energy Company, a spin-off of Yakutskenergo.
In related news, UES has revealed that it has increased generation by 5.1% through October 2006. According to recent updates, in the first 10 months of 2006, the company’s power plants increased electricity generation year-on-year by 5.1% to 563.1 billion kWh from 535.6 billion kWh.