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. Last Updated: 07/27/2016

OGK-2 Unveils Plans for GDRs in London

Power generator OGK-2 said Tuesday that it planned to float its Global Depositary Receipts on the London Stock Exchange and has mandated Deutsche Bank, Troika Dialog and UBS to organize the offering.

The company also said in a statement that it planned to offer ordinary shares in Russia and might consider issuing bonds exchangeable into GDRs before the end of the initial public offering.

OGK-2 is being spun off from former power monopoly Unified Energy System, which wants to sell its generating and distribution assets to raise money for costly upgrades and to introduce competition into the power sector.

A source close to the firm said in August that OGK-2 would start to place up to 31 percent of its stock in Moscow and London in September, as it seeks to raise up to $2 billion.

The source said OGK-2 would issue 12 billion new shares, equivalent to 31.18 percent of its enlarged charter capital. The issue would be worth $1.91 billion at current market prices.

The Federal Service for Financial Markets cleared OGK-2's request to register its additional share issue and allowed the firm to place 8.4 billion shares, or 21.7 percent of the enlarged charter capital, abroad.

Gas export monopoly Gazprom will take control of OGK-2 following a string of assets swaps, but this will be diluted following the new share issue, and the gas giant must buy new shares to retain control.

Currently, OGK-2 has a total installed generating capacity of 8,695 megawatts. It runs five electricity and thermal power plants in different parts of Russia.

OGK-2's investment program foresees 75 billion rubles ($2.93 billion) of spending to add 2,100 MW of capacity by 2011.

UES said Tuesday it completed the spin-off of power generators OGK-5 and TGK-5, ending the first phase of the company's seven-year reorganization.

Holders of stock in the utility as of 6 p.m. local time Monday will be able to collect their shares in the two generators on Friday and start trading them from next Monday, UES said in a regulatory filing.

The two generators contribute 6.5 percent to UES's capitalization, Alfa Bank said Tuesday in a note to investors.