OREANDA-NEWS. December 13, 2007. JSC IDGC of the Center has reported the results of an estimation of the subordinated companies for the purpose of shares converting. A video press conference took place in Inter-regional Distribution Grid Company of the Center, where top management of the company told about plans on termination of connection of DGC to IDGC of the Center, about results of the estimation held, and about convocation of the general meetings of shareholders, where resolutions on connection of DGC to IDGC of the Center will be adopted.

Evgeny Makarov, General Director of JSC IDGC of the Center, Konstantin Kotikov, Deputy General Director for the corporate management, Irina Lisitsyna, Director of the Department for Bank Investment Services of FС OTKRITIE, and Evgeny Babanin, Leading Expert of the Department for the Corporate Finance of FC OTKRITIE, participated in the press conference.

Company management and representatives of the consortium of investment banks (FC OTKRITIE, Raiffаisen BANK) reported that for today the following major stages of reforming of the companies had been terminated:

"Estimation of all companies was completed. Basic terms of connection of DGC to IDGC of the Center were defined, including calculation of swap ratios of DGC shares into shares of IDGC of the Center. Contracts for joining of 11 DGC within the configuration of IDGC of the Center were concluded," Evgeny Makarov, General Director of JSC IDGC of the Center reported. "We continue active negotiations with minority shareholders of DGC concerning their connection to IDGC of the Center. Dates of carrying out the extraordinary general meetings of shareholders were set, where the decisions on connection will be made. These decisions being key ones for reorganization of 11 DGC of the Center, will take place at the end of January 2008. In April of 2008, all shareholders who on that date own shares of DGC, which were joined in, will become shareholders of IDGC of the Center."

Konstantin Kotikov told the participants of the video press conference about the procedure of estimation of DGC and IDGC shares cost.

A consortium of assessment companies headed by Ernst&Young Company acted as an independent appraiser. The consortium of assessment companies used the uniform approach and uniform assumptions for estimation of shares cost. The method of estimation was developed by Deloit Company and was approved in RAO UES of Russia. The consortium of investment banks (OTKRITIE  Financial Corporation and Raffaisen Bank) held an expert estimation of results of DGC assessment, calculated swap ratios of DGC shares converting into IDGC shares and coordinated results of estimation with DGC shareholders', he noted. Simultaneously with coordination of the results with DGC minority shareholders, there took place coordination of the results of estimation with the main majority shareholder - JSC RAO UES of Russia. After approval of results of estimation at the meeting of the Estimation Committee under the Board of Directors of RAO UES of Russia on 30.11.07, estimation of DGC swap ratios was approved at the meeting of the Board of Directors of JSC RAO UES of Russia. Thus, shares of each 11 DGC in IDGC of the Center were calculated and approved. These shares reflect not only the amount of assets of each DGC joined, but also the skill to manage these assets effectively that is to receive from them the maximum feedback generated in each DGC during last years.

You can calculate quantity of IDGC of the Center's shares received by a shareholder of DGC as a result of converting, by means of the virtual calculator located on the site of the company at the address: /reform/calculate/  or calling free-of-charge: 8 800 50 50 115.

The estimation of the companies is a logical stage of reforming of the grid complex and further creation of the uniform operational company. "Creation of the operational company will allow to improve management of the network complex in regions," Evgeny Makarov said. "Some levels of management are reduced. It is important in conditions of functioning of the distributive network complex. Management by branches of the operational company will affect all directions of activity, both the financial results, and increase in the level of reliability. Thus, the important economic advantage of the uniform company becomes an opportunity to attract financing in the open market, which is so essential for development of the network complex in regions. Thus, the company's issuing of bonded loans will lower cost of financing in comparison with credit loans."

The important result of joining for minority shareholders will be increase in liquidity and market cost of assets belonging to them in the regional DGC, which will take place including as a result of diversification of the share capital. The uniform company will possess a significant share of the securities owned by portfolio investors that will directly affect growth of turns of the tenders. As a result, shareholders can carry out transactions of sale and purchase with securities of the company on any stock exchange trading day. Blue chips will appear in the market, capitalization of which will repeatedly exceed DGC capitalization.