UES Ready to Delay OGK-1 Sale 2 Years

Unified Energy System is ready to delay for up to two years the sale of electricity producer OGK-1 if a consortium of billionaires does not offer a premium price.

"We will either sell above market or not at all. If we receive these funds a year or two later, nothing bad will happen," UES chief executive Anatoly Chubais told reporters Friday.

"We have already prepared the mechanism for [delaying the sale] and it would not disrupt the investment program," he added.

The sale of OGK-1, one of the country's biggest generating companies, will raise as much as $7 billion.

It is one of the last large power producers being sold off by UES as part of a Kremlin-backed sector reform. The reform will see UES dismantled and privatized by July 1, laying the ground for a competitive power market.

The valuation of OGK-1, the last of six wholesale generating companies to be sold, is about $500 per kilowatt of generating capacity.

UES has said it will only sell at a premium to this market price, but has never threatened such a long delay.

"All of [our generating companies] have been sold either at the market price or above. We will keep this strategy until the end," he said.

But a delay of one or two years would mean OGK-1 will have to be sold after UES ceases to exist this summer, leaving the fate of the company and its shares uncertain. Chubais explain the mechanism UES has worked out for selling the firm in 2009 or 2010.