13 Mar 2018 10:10

Revaluation of Inter RAO shares not to affect FGC dividend base

MOSCOW. March 13 (Interfax) - The Russian government has revised its order regarding the dividends of companies in the Rosseti group, so that the base for payments to shareholders of Federal Grid Company UES (FGC) will not take into account the revaluation of Inter RAO shares after all.

One word was changed in the text of the order. The paragraph that spells out the exclusion from the dividend base of revenues and expenditures related to revaluation of shares in subsidiaries traded on the market and profit tax associated with them now states "joint-stock" companies instead of "subsidiary" companies.

Rosseti's press service said this decision will not affect Rosseti, but it will affect FGC, where the dividend base will not take into account "nonmonetary income/expenditures related to the revaluation of Inter RAO shares."

The revision was approved by a government order dated March 7 and published on the official website for laws and regulations.

VTB Capital analyst Vladimir Sklyar estimated that the anticipated negative effect from the revaluation of Inter RAO shares for FGC will amount to 7.595 billion rubles for 2017. "Taking into account a dividend payout of 50% of net profit, [the revision of the order] will increase the hypothetical dividend by 0.3 kopecks per share, or an additional 1.7% of dividend yield," Sklyar said. However, the key issue for investors is still the amount of funds for carrying out FGC's investment program, which are also being excluded from the dividend base, he added.

FGC owns and operates the power grid infrastructure of Russia's unified national electrical grid. FGC is 80.13% owned by Rosseti, which in turn is 88.04% owned by the government.