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. Last Updated: 07/27/2016

Irkutsk, Ministry Plot Utility Deal

The Property Ministry and Irkutsk region Governor Boris Govorin have cut national power grid UES out of a scheme to resolve the disputed ownership of a 40 percent stake in eastern Siberian energy giant Irkutskenergo, a Property Ministry official said this week.

The three claimants for the stake — the Property Ministry, the Irkutsk region administration and Unified Energy Systems — have been battling each other since 1992, when then-President Boris Yeltsin issued a decree giving state-controlled UES 49 percent of Irkutskenergo.

After an appeal by the Irkutsk administration, a court eventually returned 40 percent of that stake to the regional government.

But the legal wrangling continued.

Last year the ministry asked the Supreme Arbitration Court to return the 40 percent stake to the federal government.

This spring the ministry was awarded half of what it asked for and continued to apply through the courts for the remaining 20 percent.

But on Monday, during the latest hearing, the ministry requested that the case be postponed for a month so it could finalize an amicable agreement with the Irkutsk region.

The draft amicable agreement between Irkutsk's Govorin and Property Minister Farit Gazizullin

differs sharply from UES's restructuring plan, which UES head Anatoly Chubais presented to President Vladimir Putin on the eve of an October court hearing on the Irkutskenergo stake.

Putin redirected this draft to a working group of specialists from the ministry and the region.

Under the Chubais plan, the 40 percent stake would be split evenly between the Irkutsk region and UES, whereupon both stakes would be transferred to a special holding company.

An additional 10 percent stake, which is held by private shareholders, would also be transferred to this new holding, which would give it control of the utility.

The 10 percent stake held by private shareholders is believed to be held by metals giant Russian Aluminum, although UES refused to confirm this.

The Property Ministry official, who asked not to be identified, said the draft agreement between Govorin and Gazizullin differs considerably from the Chubais plan.

The official said the draft goes as follows: The Irkutsk region will recognize the Property Ministry's right to 40 percent of the Irkutskenergo shares.

But immediately after this, the region will get a 20 percent stake back.

This stake will be encumbered by a number of restrictions, including the need for state approval before it can be sold.

In return, the Property Ministry will need the consent of the governor of Irkutsk to transfer any of its Irkutskenergo shares to UES — something that Chubais has been trying hard to achieve.

The official said Putin will make the final decision on whether the agreement to bypass UES becomes binding, but the ministry hopes to resolve the issue before the end of the year.

On "Monday, we appealed for the hearing to be postponed because we still have to sort out about five technical questions or so," the source said.

"I hope that by Dec. 27, when the next hearing of our case is to take place, we will manage to agree once and for all on all the details."