Inter RAO to ask for government help on VEB's put option
TOMSK. Aug 13 (Interfax) - Inter RAO UES will ask the Russian government for help in paying for the put option on company shares being exercised by Vnesheconombank (VEB), Inter RAO chief Boris Kovalchuk told Interfax.
"For now we are in the negotiating stage. We do not have the resources for it. Initially we were trying to get it restructured. We were not expecting VEB's decision to exercise it. This decision should be taken by the government," he said.
Inter RAO is looking at various options for resolving the situation, possibly by selling non-core assets. Another option is to sell its stake in Irkutskenergo .
"We can also examine the option of restructuring or deferring the payment until we complete the investment program. Then we would return to this issue," Kovalchuk said.
The company in 2010 entered into a three-year put option with VEB for 529,303,482,587 of Inter RAO shares (about a 5% stake) that the bank bought for 21.278 billion rubles in a new share offering in 2010. Under the terms of the agreement, the bank can demand that the company buy back the shares as of June 2013. The agreement can be extended for three years.
The money was raised for the construction of the Urengoiskaya GRES power plant.
Inter RAO received notification in July that VEB was exercising the put option worth 31.37 billion rubles.
Inter RAO told Interfax that it had received the notification, but that it was surprised by it. The company said it had informed the bank and the government that it did not have the money available to meet the demand. The company will only be able to settle with VEB if it receives state support or sells its stake in Irkutskenergo, it said.
VEB CEO Vladimir Dmitriev said the put option was being exercised in order to raise cash for priority projects.