9 Dec 2009 13:24

TGK-5 blocking stake included on 2010 privatization list

MOSCOW. Dec 9 (Interfax) - The Russian government plans to privatize a 25.1% stake in TGK-5 in 2010.

The government will offer 308.695 billion shares in the territorial generating company, according to a government resolution dated November 30.

The shares are currently held by the Federal Agency for Federal Property Management (FAUGI). They are the shares the state received when TGK-5 and OGK-5 were spun off from RAO UES Russia in the energy reform. In all FAUGI has 26.43% of TGK-5 shares.

Viktor Vekselberg's IES Holding is the chief owner of TGK-5 with about 47% of shares.

"We retain interest in purchasing the state stake in TGK-5 on condition that it is priced at the market rate," an IES spokesman said in comments on the TGK-5 privatization.

But VTB-Capital analyst Mikhail Rasstrigin doesn't think IES is likely to be seriously interested, since it nearly has a controlling stake already. AFK Sistema , which has announced plans to expand its holdings in power generation, would seem a more likely contender.

Another option would be to sell the TGK-5 stake to Inter RAO UES , in line with a proposal from Deputy Prime Minister Igor Sechin to transfer all the state stakes remaining after the UES reform to the electricity importer and exporter. The TGK-5 stake could be used, for example, to finance a supplementary issue of Inter RAO shares.

Sovlink analyst Yekaterina Tripoten said the 25.1% stake in TGK-5 had a market value of just under $130 million based on the RTS quotation for the stock on Tuesday. "There would probably be some kind of premium for the stake," she said.

TGK-5 includes 11 combined heat and electricity plants in Chuvashia, Udmurtia and Marii-El and in Kirov region. Installed capacity totals 2,467 megawatts of electricity and 9,040 Gcal/hr of heat.