RZD Considering TGK-14 Joint Stake

Russian Railways, or RZD, is considering buying a controlling stake in power generation company TGK-14 jointly with ESN-Energo, an industry source said Thursday.

"Yes, ESN-Energo's partner [in the deal] is Russian Railways," the source close to the deal said.

TGK-14, in which miner Norilsk Nickel has a large stake, was spun off from former power monopoly Unified Energy System as part of sector reforms.

TGK-14 plans to issue 590 billion new shares in April or May. In addition to the sale of the new shares, the government's 33.6 percent stake in the company will be sold, allowing a strategic investor to gain control.

Engineering and maintenance firm E4, controlled by former UES executive Mikhail Abyzov, and Oleg Deripaska's Basic Element have expressed interest in buying control of TGK-14, which provides power and heat to parts of southern Siberia. South Korean energy major KEPCO has pulled out of the race.