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. Last Updated: 07/27/2016

TGK-12 Starts Share Sale to Raise $350M

Regional power producer TGK-12 has launched its secondary offering of shares in Moscow through which it intends to raise 8.6 billion rubles ($350 million), a company source said Tuesday.

The sale will be priced and completed in the first five days of December, the source said.

For the next 20 days, TGK-12's existing shareholders will be able to use their pre-emptive rights to buy more of the stock.

The source said new investors would then be able to buy the remaining shares, which should account for at least 49 million shares, or about 7 percent of the firm's expanded capital.

A total of 100 million shares is being placed, accounting for 14.16 percent of the firm's capital after the sale and 16.5 percent before.

The shares will not be sold directly on Russian stock exchanges but through an open tender at which potential investors will be able to bid, the source said.

Siberian Coal and Energy Company, known as SUEK, already owns 44 percent of TGK-12, also known as Kuzbassenergo, and it plans to maintain this stake by using its pre-emptive rights.

TGK-12's parent company, state-owned utility Unified Energy System, which owns 49 percent of the company, will sell the government's 22 percent stake in TGK-12 in the first half of next year.

UES intends for the rest of the issue to go to a diverse range of investors, the source said.

"If UES does not use its pre-emptive rights to more shares, then a broad circle of investors will be able to buy at least 49 million shares of Kuzbassenergo," the company source said.

TGK-12 serves the coal-mining region of southern Siberia, a strategic part of the country for SUEK, whose mining operations are electricity intensive.