OREANDA-NEWS. On March 05, 2008 RAO "UES of Russia" held public auctions to sell its stakes in OAO "Smolenskenergosbyt", OAO "Kursk Energy Retail Company", OAO "Ryazan Energy Retail Company", OAO "Chuvash Energy Retail Company", OAO "Mordovia Retail Company", and OAO "Chita Energy Retail Company".* Bids were accepted from 28 February to 4 March 2008, reported the press-centre of RAO "UES of Russia".

The public auctions were arranged by OAO "Urals Energy Management Company", Accredited Agent of RAO "UES of Russia", in accordance with the applicable Russian laws and pursuant to the resolutions taken by the RAO UES Board of Directors on 31 August 2007.

The start prices for the shareholdings in the ERCs equal to the market value determined based on the report prepared by a consortium of independent appraisers were as follows:

51,02% stake in OAO "Smolenskenergosbyt": RUB210 million;**

49% stake in OAO "Kursk Energy Retail Company": RUB250 million;

49% stake in OAO "Ryazan Energy Retail Company": RUB420 million;

100% stake in OAO "Chuvash Energy Retail Company": RUB580 million;

53,14% stake in OAO "Mordovia Energy Retail Company": RUB125 million;

49% stake in OAO "Chital Energy Retail Company": RUB220 million.

Under the new Auction Regulations, auctions now use a sealed bidding procedure. During an auction, the bidders submit their bids, which must not be lower that the reserve price, in sealed envelopes to the Auction Commission. The envelopes are opened by members of the Auction Commission in the presence of all auction participants. The shares are sold to the highest bidder.

Auction Results:
OAO "Smolenskenergosbyt"
There were three bidders for the stake in OAO "Smolenskenergosbyt". The 51,02 percent stake in OAO "Smolenskenergosbyt" was sold to OOO "IrisCompany", which offered RUB350 million for the shares. The winning bid was RUB140 million higher than the start price.

OAO "Kursk Energy Retail Company"
There were three bidders for the stake in OAO "Kurskenergosbyt". The 49 percent stake in Kurskenergosbyt was sold to OOO "IrisCompany" with a RUB251 million bid. The winning bid was RUB1 million higher than the start price.

OAO "Ryazan Energy Retail Company"
There were three bidders for the stake in OAO "Ryazan Energy Retail Company". The 49 percent stake in Ryazan ERC was sold to Novaya Energia ("New Energy") Renewable Energy Development Foundation with a RUB630 million bid The auction price exceeded the start price by RUB210 million, or 50%.

OAO "Chuvash Energy Retail Company"
There were two bidders for the stake in OAO "Chuvash Energy Retail Company". The 100 percent stake in Chuvash ERC was sold to Novaya Energia ("New Energy") Renewable Energy Development Foundation, which offered RUB650 million for the shareholding. The winning bid was RUB70 million higher than the start price.

OAO "Mordovia Energy Retail Company"
There were four bidders in the auction to sell the stake in OAO "Mordovia Retail Company". The 49 percent of Mordovia Retail Company was sold to OOO "EnergoInvest", which offered RUB190.1 million. This was more than RUB 65 million higher than the auction start price.

OAO "Chita Energy Retail Company"
There were two bidders for the stake in OAO "Chita Energy Retail Company". The 49 percent stake in Chita ERC was sold to OOO "Regional Company Reserve" with a RUB220,1 million bid. The auction price was RUB100,000 higher than the reserve price.

The auction to sell the 49% stake in OAO "Arkhangelsk Retail Company" was not held today for lack of bids.

After the auctions, RAO "UES of Russia" and the auction winners signed auction minutes and share purchase agreements in respect of the ERC shares.

Also, today the transaction has been closed today to sell a 48,66% stake in OAO "Astrakhan Energy Retail Company" through the ISTRA Information and Trading System for RUB350 million. to OOO "Khimpromtorg".

The stake in Astrakhan ERC was not sold during the auctions held previously. As resolved by the Board of Directors of RAO "UES of Russia" on 30 November 2007, the stakes in such ERCs are to be sold through the ISTRA Information and Trading System. This system can be used to hold public auctions for ERC stakes. Bids can be submitted by investors who have access to the ISTRA system and a system participant's electronic digital stamp.

Interested parties are granted access to the ISTRA system on the same terms as those currently used by RAO UES for public auctions to sell the ERCs. The specific feature of the ISTRA System is that after the price of the unsold parcel of ERC shares is declared, the shares are sold to the first bidder.

To date, RAO UES has received in excess of RUB16,586 million from the sale of the ERC shares, or one third more than the target.

Two more auctions to sell ERC shares are scheduled to take place on 14 March 2008, OAO "Ivanovo Energy Retail Company" and OAO "Pskovenergosbyt".

* The Board of Directors of RAO "UES of Russia" took a decision in principle on 8 December 2006 to dispose of the Company's stakes in ERCs.

** Two stakes in OAO "Smolenskenergosbyt", 48,68% held by RAO "UES of Russia" and 2,34% held by OAO "Smolenskenergo", were put up for sale in the auction. The share purchase agreements were executed with each of the purchasers.