Shareholders of UES (RTS: EESR) which intend to swap their shares in gencos prior to the power holding's reorganization (Gazprom, SUEK and NorNickel) will be obliged to participate in additional share issues of gencos whose shares they or their affiliates own, Interfax reported. It is known that UES's BoD has already approved an agreement with one shareholder, NorNickel, according to the minutes of the board's August 21 meeting in absentia.
According to our estimates, the power holding's intention to oblige strategic investors to support genco additional share issues is interesting both to UES itself and also to strategic investors. After the list of potential takeover targets is determined, Gazprom, SUEK and NorNickel intend to meet their targets in order to gain control in these gencos and this agreement coud simplify the ways for them to achieve their objectives, since strategic investors loyal to the power industry reform could have some preferences when additional share issues are placed.
After such agreement is inked, Gazprom could acquire simpler mechanisms to gain control in WGC-2 and WGC-6. The gas giant is eyeing precisely these two gencos and if the entire share issues are bought out, the company will spend in the range of $3.5-4 bln. SUEK will allocate $0.7-0.8 bln on TGC-13. NorNickel has already bought out the entire additional share issue of WGC-3 and could also acquire TGC-14, WGC-1 and TGC-10.
We believe that signing agreements with UES should speed up flotations of genco additional share issues.
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