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. Last Updated: 07/27/2016

TGK-8 Seeks to Raise $930M in Share Issue

TGK-8 will seek to raise at least 24 billion rubles ($934 million) via a new share issue this fall that may allow a strategic investor to gain control in another of the country's power generating companies.

TGK-8 said in a statement Tuesday that its shareholders, led by Unified Energy System, had approved an issue of 932.37 billion new shares, which amount to 40.2 percent of its enlarged capital. Existing shareholders, which also include power-focused firm Promregionholding with 30 percent, can exercise pre-emptive rights to buy shares in the issue.

UES, which is being spun off into power generation, distribution and grid operations, has in the past never exercised its pre-emptive right to buy new shares in similar issues as it reduces its exposure in generation.

Promregionholding has said it wants to buy the entire issue. Oil firm LUKoil may also bid.

The reform is designed to attract new money into generation and distribution to help build new facilities and upgrade aging equipment amid growing demand for electricity, spurred by the country's fast economic growth.

UES has already ceded control in some power generators such as OGK-3 to metals giant Norilsk Nickel and in Mosenergo to state-controlled Gazprom.

TGK-8 serves the south of European Russia and has installed capacity of 3,600 megawatts at 18 power stations in six regions.