RusHydro To Cut 17% Of Staff

RusHydro said Friday that it would cut 17 percent of its staff and hold on to its stakes in other power companies, which have fallen up to 75 percent in value.

The total value of the stakes, which RusHydro received through the breakup in July of former power monopoly Unified Energy System, was 9 billion rubles ($329 million), according to the company's financial results by Russian accounting standards for the first nine months of this year.

The largest of these assets is a 21.71 percent stake in power firm OGK-1.

"By my estimates, that value is now 3.5 to 4 times lower," RusHydro board member Oleg Oksuzyan said at a news briefing.

Chief executive Vasily Zubakin said, "The best thing we can do with these assets at a time like this is just hold on to them."

RusHydro is the world's second-largest producer of hydroelectricity after Hydro Quebec.

Zubakin said the staff cuts, for which he did not give a time frame, would have been necessary even before the onset of the global financial crisis. "But the crisis has served as a signal to raise efficiency."

Despite the financial turmoil of recent months, RusHydro is sticking to its net profit forecast of 13 billion rubles to 14 billion rubles for 2008, Zubakin said.

The forecast was revised downward in August.