OREANDA-NEWS. On October 15, 2007 Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais and E.ON's CEO Wulf Bernotat have signed a Memorandum of understanding and completion of acquisition of the "government stake" shares in OAO "WGC-4" owned by RAO "UES of Russia" and the additional shares issued by OAO "WGC-4", reported the press-centre of RAO "UES of Russia".

The transaction amount was in excess of RUB146,3 billion. The share offering proceeds of RUB46,4 billion raised by OAO "WGC-4" will be used to finance the construction of new power units under the company's investment programme. The proceeds from the sale of the "government stake" shares in OAO "WGC-4" owned by RAO "UES of Russia" in the amount of RUB99,9 billion will be used to eliminate the shortage of investments at OAO "UES FGC" and OAO "HydroWGC".

As a result of the transaction, E.ON Russia Power GmbH and RAO "UES of Russia" will hold 69,34% and 22,49% in WGC-4, respectively.

According to the Memorandum, the parties view the completion of the transaction as a signal to start fruitful cooperation which is beneficial both for WGC-4 and for E.ON's role on the Russian electricity market.

RAO "UES of Russia" and E.ON have affirmed their commitment to implementing the WGC-4 Investment Programme in accordance with the Shareholders' Agreement signed previously. The Shareholders' Agreement ensures designated-purpose use of the proceeds from the new share offering. It sets forth the shareholders' undertaking to perform all legal and administrative formalities needed to implement the WGC-4's approved investment programme.

The parties have also agreed that during the transition period (until the WGC-4 shareholders elect new Board comprising E.ON representatives) RAO "UES of Russia" will agree with E.ON its stance on the matters considered by the WGC-4 Board of Directors.