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. Last Updated: 07/27/2016

Ministries See Plan for Power Grid Restructure

International consulting giant Arthur Andersen has presented officials with its preliminary plan to restructure the country's national power grid.

Andersen's plan, which the government is paying $300,000 for, is the most radical to date and seems to please Unified Energy Systems' minority shareholders, who have been very vocal in the restructuring process.

Officials from the Energy, Nuclear Power and Economic Development and Trade ministries saw the plan for the first time at a meeting Monday. Arthur Andersen is expected to present its final recommendation to UES next week.

Under the proposal, the restructuring would take place in two stages, according to one of the officials at the meeting who asked not to be named.

In the interim phase, UES would become a temporary holding company — UES Holding — that would contain several new structures and retain the same shareholders as UES has now.

UES Holding would consist of a holding company uniting the power stations, a grid company, between one and five federal generating companies and up to seven guarantor energy suppliers.

All of UES' assets would be distributed among these structures.

The federal generating companies would include those stations currently 100 percent owned by UES and the largest energo thermal stations. The stations, classified as subsidiaries of the generating companies, would form the base of the electricity market, would be able to charge market prices and their activities will be licensed.

The thermal power station holding would include the rest of the power stations. The guarantor suppliers would receive distribution arms of current UES subsidiaries, but the government will continue to set their tariffs. The grid company would have the high-voltage transmission lines and dispatching facilities.

During transition, UES Holding would own between 51 percent to 100 percent of all of the above structures.

In the second phase, UES Holding would be liquidated and its controlling stakes in the structures — except for the grid — would be sold.

The government would keep at least 51 percent of the grid.

The plan does not clarify how long the transitional phase would take, but it does describe in detail what would happen to minority shareholders who have opposed previous plans.

Each UES minority shareholder would receive shares in each of the federal companies, in each guarantor supplier, in the power station holding and in grid companies in proportion to its share in the utility.

The private co-owners of the regional UES subsidiaries will also receive shares in these companies. It is proposed that each company formed in the course of restructuring will present the minority shareholders of their subsidiaries with the specific schemes for exchanging shares six months after creation.

"I believe that this version is much better than what the UES managers and officials proposed. This version suits me fine," said Alexander Branis, director of Prosperity Capital Management and a vocal critic of the restructuring. "It is also important that this plan includes the sale by the state of its shares in the companies being created and not assets belonging to other shareholders," he said.

Arthur Andersen refused to comment on its proposals.