Majority shareholder of TGK-14 selling up to 20% of company in SPO on Moscow Exchange

MOSCOW. Sept 23 (Interfax) - PJSC TGK-14 has announced a secondary public offering (SPO) on the Moscow Exchange, during which its principal shareholder, JSC Far Eastern Management Company (FEMC), will sell up to 20% of the company.

FEMC currently owns 85.5% of TGK-14.

The placement price within the SPO will be set after the order book offering, though should not exceed 0.01125 rubles per share. Bookbuilding will be from September 23 to October 3, though could be completed early as per the shareholder's decision, TGK-14 said.

TGK-14 is trading at around 0.0113 rubles a share on the Moscow Exchange so a 20% stake could be worth 3.055 billion rubles at the upper price range.

The offer is available to Russian qualified and non-qualified investors, namely to individuals, as well as to Russian institutional investors.

At least 65% of the funds raised - minus the costs of organizing the transaction and taxes - will be utilized to pay off the shareholder's debt to TGK-14. The generating company will use the funds to finance priority projects, which are upgrading generating equipment and increasing the capacity of the Chita CHPP-1 and Ulan-Ude CHPP-2. The designated purpose is to pay suppliers of the main technological equipment (Ural Turbine Plant, ELSIB, Sibenergomash-BKZ).

The shareholder and its affiliates have assumed standard lock-up obligations for 180 days.

The stake of TGK-14 shares in free float could total around 29% because of the deal. The final amount of the free float depends upon the number of shares sold during the SPO.

PJSC TGK-14 provides thermal energy to consumers in the Trans-Baikal Territory and Buryatia. The company includes seven thermal power plants, two power complexes with installed electric capacity of 649.57 MW and a thermal capacity of 3,120.77 Gcal/h.

According to TGK-14, the co-owners of the FEMC are the former head of the corporate finance department of Russian Railways - former CEO of Sinara-Skoda LLC Konstantin Lyulchev (78%) and Viktor Myasnik (22%). The latter was the CEO of TGK-14 in 2015-2017, and then was appointed head of the Directorate for Major Repairs and Reconstruction of Railway Electrification and Power Supply Facilities, a branch of Russian Railways.