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. Last Updated: 07/27/2016

TGK-1 Will Raise $1.3Bln

ST. PETERSBURG -- TGK-1's shareholders have approved an additional share issue to raise about $1.3 billion in a public offering in July.

"TGK-1's shareholders approved the proposal to increase the company's share capital by issuing an additional 1.88 trillion ordinary shares," the regional power utility said in a statement Tuesday.

"The shares will be placed via a public offering at a price to be determined by TGK-1's board of directors following the exercise period for pre-emption rights," it said.

Finnish utility Fortum, which holds 25.7 percent in TGK-1, said Tuesday that it planned to participate in the share issue to keep its ownership stake at the current level.

"Fortum's target is to maintain its current, slightly over 25 percent stake in the company. Fortum is thus preparing for acquisition of the corresponding amount of new shares," Fortum said in a statement.

The share offering aims at increasing the share capital by about 32.4 billion rubles ($1.26 billion), Fortum said, indicating that it would invest more than $300 million in the issue.

A stake of more than 25 percent gives Fortum the right to block board decisions.

Among those expressing interest in the share issue, market and company sources have also named Italy's Enel, Germany's E.On, Gazprom and the European Bank for Reconstruction and Development.