'Unfriendly' minority shareholders of Rosseti, FGC entities able to convert shares into FGC shares during reorganization
MOSCOW. Oct 11 (Interfax) - Russian President Vladimir Putin has permitted the conversion of PJSC Rosseti and FGC UES shares belonging to "unfriendly" non-residents into shares of FGC during reorganization, according to a corresponding instruction posted on the government's official internet portal of legal information.
As previously reported, in addition to Rosseti, OJSC Tomsk Trunk Grids and JSC Kuban Trunk Grids [both FGC-controlled entities that are 80.13% owned by Rosseti], as well as JSC DVEUK-ENES, or Far East Energy Management Company [owned by Russia's Federal Property Management Agency (Rosimuschestvo)], will join FGC.
The shareholders of FGC, Rosseti, Tomk Grids and DVEUK-ENES voted in September to approve the company's reorganization by way of a merger with FGC. Andrei Ryumin, the head of FGC, will remain the new entity's general director - Rosseti used to be FGC's management company
The merger will be carried out through a supplementary share issue for the merger consisting of 1.75 trillion ordinary shares, par value 50 kopecks each or 874.4 billion rubles in total. The shares will be issued by converting ordinary and preferred shares in the companies being merged into additional FGC UES ordinary shares.
According to the law on joint-stock companies, shareholders dissenting against the reorganization or who abstained from voting will be able to tender their shares for repurchase. But the repurchase had been complicated by the fact that shareholders from jurisdictions listed as unfriendly who do not agree with the upcoming reorganization of the company or who will not take part in the voting can exercise the right to tender their shares only by making a request to the Energy Ministry which, in turn, refers these issues to the sub-commission of the government commission for monitoring foreign investment.
Russia's state stake in the charter capital of the merged company must be no less than 75% plus one share, which will be achieved, among other things, by cancelling some of the FGC UES shares owned by Rosseti.
FGC owns and manages the power grid facilities of the Unified National Electric Grid of the Russian Federation. Rosseti owns 80.13% of FGC's shares. In turn, Rosseti is 88.04% owned by the government, and another 1.28% belongs to GazpromFinance B.V. Rosseti is currently Russia's biggest grid company, bringing together the interregional and regional distribution grid companies.
FGC owns 100% of Kuban Grids and 90.48% of Tomsk Grids.
Rosimushchestvo is now the sole owner of DVEUK-ENES. The company's assets used to be split between FGC and RusHydro , and DVEUK itself was split into two - DVEUK-ENES and DVEUK-Generation Networks. RusHydro shareholders voted at the beginning of July in favor of a supplementary issue of 10 billion ordinary shares in favor of the Russian government worth 10 billion rubles in exchange for DVEUK-Generation Networks and Sakhalin Energy Company.
The reorganization of the companies should be complete early next year, Andrei Ryumin said during an interview with Rossiya 24 TV channel at the beginning of September.