24 Nov 2009 15:39

Sistema could finalize electricity strategy by spring 2010

MOSCOW. Nov 24 (Interfax) - The Sistema holding expects to have formulated a strategy for its electricity segment by the spring of 2010, Pyotr Bezukladnikov, the holding's executive vice president for electricity, told reporters.

The strategy will cover Bashkirenergo , which Sistema recently acquired together with other fuel and energy companies based in the internal Russian republic of Bashkortostan.

Sistema plans to decide on a method for spinning the grid business off from Bashkirenergo, as the law states that sales and grid businesses cannot be owned simultaneously.

Bezukladnikov said Sistema would not be making a goal of building up assets as too much capacity might reduce efficiency. Its main goal is business efficiency from a financial point of view. "Sistema is interested in what financial results can be achieved in the foreseeable future," he said.

If Sistema does buy new assets it will only be interested in controlling stakes, Bezukladnikov said. He commented on speculation that Sistema was interested in the stakes owned by IES Holding in the TGK-6 and TGK-7 territorial generating companies that operate in regions adjacent to Bashkorenergo. IES bought these stakes from RAO UES of Russia, but it has not yet paid for them and they could be sold. "Minority stakes are of little interest to us," Bezukladnikov said.

But Sistema is "in permanent contact" with market participants regarding possible acquisitions, he said.

Sistema will assess the opportunities for acquisitions during the strategy-building, and plans to hire consultants fore this in December.

Regarding power sales, Sistema plans to wait for the rules for the retail electricity market to emerge, including where the status of guaranteed supplier is concerned. It will be impossible to assess the sales assets until then and Sistema is not currently in talks with anybody about buying sales assets, Bezukladnikov said.

The law gives until January 1, 2011 to spin off grid operations. Bezukladknikov did not say how this might be done in Sistema's case, but he did say distribution assets might be of interest if they switch to the Regulated Asset Base tariff system.

Bashkirenergo's installed capacity is currently 4,500 megawatts. Its sales revenue was $2 billion in 2008.