OREANDA-NEWS. August 24, 2007. The list of shareholders of RAO "UES of Russia" entitled to receive shares in OAO "WGC-5" and OAO "TGC-5", which will be spun off during the first phase of the RAO UES reorganization, will be made AS OF THE DAY OF OFFICIAL REGISTRATION of the interim holding companies—OAO "WGC-5 Holding" and OAO "TGC-5 Holding"—and their simultaneous merger with and into OAO "WGC-5" and OAO "TGC-5", respectively. On that day, the first phase of the Company's reorganization will be completed, reported the press-centre of  RAO "UES of Russia".

RAO UES Shareholders of record as at 18:00 on that date will receive shares in OAO "TGC-5" and OAO "WGC-5" in addition to the Parent Company's shares held by them. The number of shares in RAO "UES of Russia" held by them as of that date will remain the same.

The first phase of the Company's reorganization may be completed on 3-4 September 2007, as RAO "UES of Russia" expects to file documents with the tax authorities for the registration of OAO "WGC-5 Holding" and OAO "TGC-5 Holding" on 27-28 August 2007. According to the regulations, the official registration of OAO "WGC-5 Holding" and OAO "TGC-5 Holding" must be completed within five working days.

The reorganization OAO RAO "UES of Russia" is to be implemented in two phases.

RAO UES shareholders approved the resolution on the first phase of the reorganization at the EGM held on 6 December 2006. On 19 April and 1 June 2007, shareholders of OAO "TGC-5" and OAO "WGC-5" approved the merger of OAO "WGC-5 Holding" and OAO "TGC-5 Holding" with and into OAO "WGC-5" and OAO "TGC-5", respectively.

The new shares in OAO "WGC-5" and OAO "TGC-5" will be distributed among the shareholders in RAO "UES of Russia" in the following ratios:

for each ordinary share in RAO "UES of Russia" held, shareholders will receive 0.41 of an ordinary share in OAO "WGC-5" and 13.59 ordinary shares in OAO "TGC-5";

for each preferred share in RAO "UES of Russia" held, shareholders will receive 0.37 of an ordinary share in OAO "WGC-5" and 12.45 ordinary shares in OAO "TGC-5".

Trading in shares of RAO "UES of Russia", OAO "WGC-5" and OAO "TGC-5" will not be suspended. The shareholders of RAO "UES of Russia" will not incur any extra expenses in connection with receipt of the shares in OAO "WGC-5" and OAO "TGC-5".

ADR and GDR holders of RAO "UES of Russia" will also be entitled to receive shares in OAO "WGC-5" and OAO "TGC-5" in the form of shares or GDRs. For that purpose, both generation companies have entered into deposit agreements with the depositary bank, The Bank of New York Mellon, and received consent from the FSFM of Russia to the offering and trading of the companies' shares outside of Russia.

The matters related to the second phase of the Company's reorganization will be considered at the EGM of RAO UES shareholders scheduled for 26 October 2007. It may be attended by all RAO UES shareholders of record as at 18:00 on 23 August 2007, the record date for the EGM. On the same date the books were closed for DRs representing RAO UES shareholders. Preferred shareholders of RAO "UES of Russia" are also entitled to vote at the EGM of 26 October on the Company's reorganization.

According to the model for the second (final) phase of the Company's reorganization, by 1 July 2008 the asset restructuring will be completed via demerger of the companies comprising the ultimate sector structure (FGC, System Operator, WGCs, TGCs, etc.) and the Parent Company, RAO "UES of Russia", will terminate its activities.

The key underlying principle of the final phase of the reorganization is pro rata distribution of RAO "UES of Russia" among all shareholders. This means that as a result of the reorganization, the minority shareholders of RAO "UES of Russia" will receive shares in FGC, HydroWGC, IDC Holding, RAO Energy Systems of East, INTER RAO UES, five WGCs and thirteen TGCs, in proportion to their interests in the Parent Company.

Shareholders of RAO "UES of Russia" who vote against the reorganization or do not take part in the vote at the EGM on 26 October 2007 will be entitled to require the Company to repurchase all or part of their shares in the Company. The share repurchase price has been fixed by the Board of Directors at RUB32.15 per ordinary share and RUB29.44 per preferred share of RAO "UES of Russia". This price will not be changed.