OREANDA-NEWS. On November 29, 2007 RAO "UES of Russia" and Highstat Ltd., whose ultimate beneficial owner is Alexey Mordashov, executed a Share Purchase Agreement in respect of shares of Power Machines, reported the press-centre of RAO "UES of Russia".

As a result of the competitive negotiation for the blocking stake (25% plus one share) in Power Machines, RAO "UES of Russia" accepted the bid made by Highstat Ltd.

Highstat Ltd. offered RUB11,8 billion (US$486 million) for the shares, or RUB5,42 per ordinary share, which is 25 percent higher than Power Machines' current market prices. Having reviewed the bids for the shares, RAO UES named Highstat Ltd. as the best bidder.

The transaction is expected to close in during the first ten days of December.

The proceeds from the transaction will be two times the amount spent by RAO "UES of Russia" on its purchase of the stake from Interros Holding Company and TGC-1 and additional shares issued by Power Machines. RAO UES spent a total of RUB5.48 billion on building up the blocking stake in Power Machines and investments in the company's expansion.

The proceeds from the sale will be used to cover the deficit in funds needed to finance some investment projects, and to create a reserve fund to finance the reorganization of RAO "UES of Russia".

The Board of Directors of RAO "UES of Russia" approved the sale of its Power Machines stake on 30 March 2007. The decision to sell the stake to a Russian private strategic investor selected through competitive negotiation was taken on 31 August 2007.

Over the past two years, since RAO UES acquired the stake in Power Machines, the latter's market capitalization more than quadrupled. During the period, Power Machines produced its development strategy and investment programme.

The power engineering company's investment programme is designed to accommodate the generation companies' rapidly growing demand for advanced and competitive power equipment.

Power Machines' expansion programme will be primarily financed with the proceeds from its two additional share issues, the first of which was completed in August 2007. Power Machines raised more than $270 million in private investment from Russian and foreign companies.

Its book of orders built over these years is worth about $2 billion, with the majority of the orders coming from Russian energy companies.