UES Plans to Sell TGK-11 Stake to E4 Group

Former electricity monopoly Unified Energy System will sell the state's 29 percent stake in power producer TGK-11 to engineering firm E4 Group, sources close to the sale said Wednesday.

"To my knowledge, the deal has already been signed," one of the sources said.

Another source said the purchase price would be 4.03 kopeks per share, implying a value of $436 per kilowatt of TGK-11's generating capacity.

TGK-11 closed at 3.31 kopeks per share on the MICEX exchange, a 17.9 percent discount to the price offered by E4.

It is now in the process of holding a secondary issue of 181 billion new shares, which will equal 26 percent of the share capital after the sale.

By buying up the newly issued shares and the government's stake, E4, which is controlled by former UES deputy director Mikhail Abyzov, would be able to gain control of TGK-11.

Siberian Coal and Energy Company, known as SUEK, owns around 30 percent of the company and could also gain control if it buys all the new shares.

The sale of TGK-11 has proceeded despite a court order to block it brought at the insistence of the country's largest oil firm, state-controlled Rosneft.

Rosneft is embroiled in a politically heated legal dispute with TGK-11 and UES, which says it has secured the support of President Dmitry Medvedev in seeking a resolution.

Some strategic investors were scared away from TGK-11 by the legal issues, and E4's only competitor for the stake was metals and mining firm Mechel.