OREANDA-NEWS. July 23, 2007. RAO UES of Russia has made provisions for the repurchase of shares from shareholders who disagree with completion of the reorganization process, in an amount exceeding USD 115 million, but it expects that the shares presented for the repurchase will not actually be worth more than USD 2 or 3 million.

RAO UES separation balance sheet includes provisions for RUR 3 billion (slightly over USD 115 million) to be spent on share repurchase from shareholders, a source familiar with the document told.

A source at RAO confirmed this figure and noted that a similar amount was provided for repurchase of shares from shareholders who disagreed with the first stage of reorganization, namely: spin-off of WGC-5 and TGC-5. "Shares worth some RUR 75 million were presented for repurchase then".

RAO UES Board of Directors has earlier approved the price of shares to be repurchased from shareholders who disagree with the reorganization at RUR 32.15 per an ordinary share and RUR 29.44 per a preferred share.

This level is quite close to the market price, and hence RAO has developed a mechanism to guarantee its obligations to the shareholders in the event a large number of shares is presented for repurchase. The power holding company is considering attraction of loans to be repaid by proceeds from sale of the repurchased shares in the market.

To avoid unnecessary problems, RAO UES is holding consultations with minor shareholders in order to explain to them the benefits and prospects of shares of the companies to be spun-off from the holding company at the final stage of reform, noted the source at RAO.

"Work is under way, and RAO expects that shares presented for repurchase will be worth a couple of million".
A source at the power holding company in turn denied having any forecasts as to how many shareholders who had voted against reorganization would present shares for repurchase.