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Shareholders in UES promised pro rata genco shares

20 May 2003 – Shareholders in Russia’s UES power utility have been reassured that they will receive pro rata share allocations in generating companies to be spun off in a restructuring and auction off stock unclaimed by current owners, a UES official said on Monday.

“The scheme we are looking at now in our draft (reform strategy) document assumes that, as a first step, UES shareholders have the opportunity to receive the same percentage of shares in wholesale generating companies for their shares in UES,” said Deputy Chief Executive Vyacheslav Sinyugin.

The state-owned utility is to broken up into private power generating companies, including 10 large wholesale generators in order to create a competitive market however, private investors have long worried that they may lose out in the restructuring. Many see a pro-rata distribution of stock in the spun-off businesses as a way to ensure they receive their fair share of the assets.

“At the second stage, whatever was not exchanged would be put up for auction where the means of payment is UES shares,” Sinyugin said.

UES’s board of directors is due on Friday to review the “five plus five” five-year strategy for the company.