OREANDA-NEWS. At its monthly meeting on October 26, UES’s board of directors approved the sale of the government stake (21.16%) in Mosenergo via a public placement as a basic option. UES intends to place Mosenergo GDRs on the London Stock Exchange. According to the Alfa Bank analytic department, the placement is scheduled for February 2008. The cash raised through this sale will be used to finance the Federal Grid Company’s CAPEX program. Meanwhile, UES is also considering an alternative option: the sale of a stake of no less than 25%+1 share in one bloc together with the Moscow government’s 5.4% stake.

Experts emphasize that if UES does not sign the respective agreement with the Moscow government before November 16, UES will accept the buyout offer from Gazprom, tendering an 8% stake to the gas giant, while the remaining shares from the government stake will be placed publicly. The buyout offer
announced by Gazprom, the controlling shareholder of Mosenergo, with a price of R6.5 ($0.26) per share is valid until November 17. "Although most of this information has been disclosed before, we view this development as POSITIVE for Mosenergo’s shares, as the public placement of the government stake will improve its liquidity. This is important because Mosenergo is notable for its low free float of only 3-4%. We maintain our HOLD rating and 12-month target price of $0.23 per share," the experts conclude.