TGK-11 Asset Ruling Postponed Until May

In a step that could jeopardize the sale of southern Siberian power producer TGK-11, a Moscow court on Friday postponed a decision until May on splitting off one of the firm's main assets, Tomskenergo, in which Rosneft formerly controlled a blocking stake.

Analysts said the delay would likely help Rosneft either regain its stake in Tomskenergo, or buy up all of TGK-11 at a reduced price.

The Moscow Arbitration Court was hearing a lawsuit brought last month by Neft-Aktiv, a Rosneft affiliate, contesting the formation of TGK-11 last year. Neft-Aktiv claimed that it had not received an absentee ballot to vote at a shareholders meeting to merge Tomskenergo into the regional power firm.

On Friday, TGK-11's lawyer, deputy general director Anna Kaflevskaya, rejected the allegation, saying the company had received all the proper documents in time.

The judge adjourned the hearing until May 7, after accepting the arguments of a team of several Rosneft lawyers that Neft-Aktiv had not received three large volumes of documents it had requested from TGK-11 for Friday's hearing.

The ruling came a day after a Novosibirsk court ruled that the TGK-11 sale could not go ahead until a decision was reached on Rosneft's lawsuit.

TGK-11's shares reacted badly to the court rulings, falling 5.9 percent Friday to 2.81 kopeks.

The TGK-11 auction, of a state stake of 28.9 percent and an additional share emission of 26 percent, was scheduled to happen before the end of March. Further delays in the case could prevent UES selling off TGK-11 before the national utility is wound up July 1.

UES had been seeking to raise about $300 million in the secondary offering.

UES spokeswoman Tatyana Milyayeva said Friday that the court case was taking a toll on TGK-11's sale price, as investors had previously been willing to pay about $400 per megawatt, but were now only prepared to pay $350.

"TGK-11 badly needs money as it is building a power station that will provide electricity to 300,000 people in Omsk," Milyayeva said. "Even if we don't meet the deadline TGK-11 will be sold off, but the sooner the company gets investment, the better."

TGK-11 was formed last year through the merger of Tomskenergo and Omsk Electricity Generation, leaving Rosneft's Neft-Aktiv with a 5 percent stake in the combined company.

"Its quite obvious that Rosneft wants to split the company," a source close to UES said ahead of Friday's ruling. "There are two other lawsuits against us. We don't know what they are yet. Now it's three, but it may become 23."

"Rosneft may be trying to delay the auction because it needs time to raise investment for the purchase," said Matvey Taits, a utilities analyst at UralSib.

Neft-Aktiv last year represented Rosneft at several bankruptcy auctions of Yukos assets, which it bought at discounted prices to make Rosneft the country's largest oil producer.

Rosneft has an interest in the Tomsk region through one of those assets, its 50 percent stake in former Yukos unit Tomskneft, which produces 240,000 barrels per day.

No one at Rosneft's press office answered telephone calls Friday.

Norilsk Nickel, U.S. power firm AES, Germany's Evonic Industries and EvroSibEnergo are also thought to be interested in bidding for TGK-11 shares, Reuters reported Friday, citing industry sources.

Siberian Coal and Energy Co., or SUEK, which until recently held 32 percent of TGK-11, may not now bid in the sale, according to a source close to the coal miner.

"We are not interested in the asset, as we do not work in that region and can't create a vertically integrated company there," the source said.