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. Last Updated: 07/27/2016

UES to Sell $300M Generator Stake to Power Its Expansion

A unit of national power monopoly Unified Energy Systems plans to sell 25 percent in its NorthWestern power generation plant, located near St. Petersburg, on Sept. 23 for at least $111 million, the unit said Thursday.

Inter RAO, the export arm of UES, said it wanted to raise the money to fund the plant's expansion, estimated to cost 9 billion rubles ($336 million).

The plant, which exports most of its electricity output to Finland, is 66.45 percent controlled by UES, while Inter RAO controls around 25 percent. A minority stake also belongs to gas monopoly Gazprom.

After UES decided to transfer management rights to a consortium of local and foreign investors -- Italy's ENEL and Russian private investor group ESN -- the plant was the first to feel the effects of the plan.

The management transfer and sale of the stake are part of a broader UES strategy to raise billions of dollars in the next few years to upgrade the country's outdated power system at a time of growing demand for electricity.

UES also plans additional share issues at its power generation units OGK-3, OGK-4 and TGK-9, which have been spun off from UES as part of a big restructuring plan.

UES said in a separate statement Thursday that its board had postponed discussions on additional share issues for the units to Aug. 30 from Aug. 25.

State-controlled UES has already approved an additional share issue for power generation unit OGK-5, a pilot project to raise money for investments, restructuring and expansion.

Shareholders of OGK-5 will now meet Aug. 31 to clear the 5.1 billion ruble ($190.4 million) issue, a technical move as UES controls 87.7 percent of the stock. The generation unit said in a separate statement Thursday that its shareholders would meet again on Sept. 26 to approve its first-ever interim dividend of 1.04 kopeks per share for the first half of 2006.