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. Last Updated: 07/27/2016

UES Sets Sale Size for Generators

Unified Energy System, the country's national utility, said Friday that it had agreed to cede control of Volzhskaya TGK, a power producer targeted by billionaire Viktor Vekselberg, and three other generation units as it prepares for a breakup.

UES will reduce its stake in the Volga region-based generator, also known as TGK-7, to as little as 15.28 percent from 54.47 percent, the utility firm said in a statement. The utility also agreed to drop its stake in St. Petersburg-based TGK-1 to 10.9 percent from 55.7 percent; in Krasnoyarsk-based TGK-13 to 31.7 percent from 56.9 percent; and in Chelyabinsk-based TGK-10 to 12.7 percent from 81.6 percent.

The government is breaking up UES into generation, distribution and retail businesses and selling off shares to stimulate competition and fund upgrades of its aging power network.

UES will sell 9.6 billion existing TGK-7 shares, which represent the state's interest in the company through its 52 percent holding in the national utility. The Volga region-based unit will also sell 3.9 billion new shares. "The two sales will be combined," UES said.

UES will use a similar scheme to reduce its stake in the other three generating companies and raise cash with share sales.

Vekselberg's power industry holding, Integrated Energy Systems, has built up a 23 percent stake in TGK-7 over the past 18 months and will bid for more shares, the company said July 5.