Gazprom, a strategic shareholder in OGK-2 (RTS: OGKB), is forming a team of managers for the genco. Four top managers have taken up positions at the company, the genco said in a statement. The management team has now been almost formed, with only one vacancy, ‘deputy general director for capital construction', not yet filled. The company's new managerial system is to be established by July 30. The BoD is to convene on the same date.
In July, general director Mikhail Kuzichev and 16 top managers quit the OGK-2 generation company. Under the terms of the contract, Kuzichev received a ‘golden parachute', worth RUB 63 million, and approved severance payments to the top managers who left the company along with him. The total payout reached RUB 557 million. Gazprom has taken the outgoing managers to court and initiated an all-round probe into their performance at the company. Following the lawsuit, only two of the deserters have returned to the company, having paid back RUB 20 million.
We are upbeat about the formation of a new management team for the genco, since dragging out this process could have a negative impact on the company's financial and operating results. In our view, the news will have a beneficial impact on the genco's stock valuations.
We estimate the fair value of OGK-2 at USD 0.095 per share, which corresponds to a BUY recommendation.
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