OREANDA-NEWS. August 29, 2007. OAO RAO "UES of Russia" has filed documents needed to complete the first phase of its reorganization to Interdistrict Inspectorate No. 46 of the Federal Tax Service of Russia. Under Russia' law, it is expected on 3-4 September 2007 that the authorities register the spin-off companies and OAO "WGC-5" and OAO "TGC-5" distribute their shares among shareholders of OAO RAO "UES of Russia".

OAO RAO "UES of Russia" has filed an application to entry a record in the Unified State Register of Legal Persons regarding the state registration of the interim spin-offs of RAO "UES of Russia" – OAO "WGC-5 Holding" and OAO "TGC-5 Holding" – with simultaneous record of termination of these Holding companies as legal persons in connection with their merger with and into OAO "WGC-5" and OAO "TGC-5", respectively. As provided by the regulations, this procedure is to be completed within 5 working days.

RAO UES Shareholders of record as at 18:00 Moscow time on the day of the State registration 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 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 of 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.

In order to receive GDRs (Reg S DRs) representing shares in OAO "WGC-5" and OAO "TGC-5", the DR holders of RAO "UES of Russia" will be required, within 14 days after the completion date of phase one of the reorganization, to provide to the respective depositary banks proof that they are not residents of the United States and are not acting in the interests of such persons, were outside the US as of the time of receipt of the RAO UES Information Memorandum of 3 November 2006 and at the time of vote on the Company's reorganization, and will be outside the US territory at the time of receipt of shares or GDRs representing shares in OAO "WGC-5" and OAO "TGC-5". In addition to such proof, the persons wishing to receive shares in OAO "WGC-5" and OAO "TGC-5" in the course of the reorganization will be required to provide details of their accounts on in Russia within the same period.

ADR and GDR holders of RAO "UES of Russia" that do not provide the above documents will not be entitled to receive securities in the spin-off companies. Instead they will receive cash proceeds from the sale by the depositary banks of the WGC-5 and TGC-5 shares in lieu of the shares they are entitled to.

In regard to current RAO UES stock quotations, it will be noted that they considerably correspond to the current stock market behavior in general. RAO "UES of Russia" has every reason to believe in the long-term growth of its capitalization despite the negative dynamics on the stock market over last weeks.

The EGM of RAO UES shareholders is scheduled for 26 October 2007. The shareholders will take a decision on the final phase of the Company's reorganization. Within the preparations to the EGM, on 23 August 2007, the record date for the EGM, RAO UES set a list of persons entitled to take part in the meeting. RAO UES Shareholders of record as on 23 August 2007 who do not take part in the vote at the EGM or vote against the reorganization will be entitled within 45 days to require the Company to repurchase their shares in the Company.

According to the schedule, the distribution of RAO UES assets and the reorganization of the Company will be completed by 1 July 2008. Before the record date in June 2008, RAO UES shares will continue to trade on the stock market. The way the shares to be distributed among the shareholders after the record date, will be defined in coordination with major traders and brought to the notice of all shareholders and stock market participants.

To take part in the final distribution of the assets, a shareholder must hold RAO UES shares as at the record date (expected in June 2008). The Company will bring the record date to the notice of shareholders and stock market participants beforehand.

As a result of the distribution of the assets within the final reorganization of the Company, RAO UES minority shareholders (except for Gazprom, Suek, Norilsk Nickel) who vote for the reorganization will receive shares in OAO "UES FGC", OAO "HydroWGC", OAO "IDC Holding", OAO "RAO Energy Systems of the East", OAO "INTER RAO UES", ОАО "WGC-1", ОАО "WGC-2", ОАО "WGC-3", ОАО "WGC-4", ОАО "WGC-6", ОАО "TGC-1", ОАО "TGC-2", ОАО "Mosenergo", ОАО "TGC-4", ОАО "TGC-6", ОАО "Volzhskaya TGC", ОАО "YuGC TGC-8", ОАО " TGC-9", ОАО "TGC-10", ОАО "TGC-11", ОАО "Kuzbassenergo", ОАО "Yeniseyskaya TGC", ОАО "TGC-14" pro rata to their holdings in OAO RAO "UES of Russia" shares (taking into account OAO RAO "UES of Russia"'s holding in these companies).

OAO RAO "UES of Russia" is confirmed that due to the sector reform and RAO UES reorganization, the aggregate value of assets distributed among RAO UES shareholders will be much higher than current RAO UES stock quotations.

Once again, OAO RAO "UES of Russia" underlines that it sees creation of value for its shareholders as one of its top priorities; and it's transparently, clearly and in due time that the Company will bring essence and the terms of all the reform processes to the notice of investment community

This announcement was disclosed in the Interfax newswire at 12:36 hours Moscow time on 27 August 2007.