The Board of Directors of RAO UES of Russia has approved an additional issue of shares in Generation Company Four of the Wholesale Market of Power and Energy (WGC-4). This is in line with the decision of the RAO UESR Board of Directors of June 23, 2006, which defined a list of pilot projects for the placement of additionally issued shares in WGCs and TGCs to raise funds for the development of heat generation.
The purpose of increasing the authorized capitals of WGC-4 is to raise funds to finance the construction of new generating facilities. Specifically, the investment program of WGC-4 provides for the construction of replacement capacities at Shaturskaya TPP and Yaivinskaya TPP (CCP-400), Surgutskaya TPP-2 (CCP-800), and a power unit at Berezovskaya TPP (SPP-800).
Pursuant to the Board of Directors decision, the representatives of RAO UES of Russia at the General Meeting of Shareholders of WGC-4 were instructed to vote for defining the limit of authorized ordinary shares in WGC-4 as 38,900,000,000 shares with a par value of 1 ruble each. The representatives of RAO UES of Russia were also instructed to support making relevant amendments to the Articles of Association of WGC-4.
The shares offered by WGC-4 for placement afford their holders the rights specified in the Articles of Association of the Company.
The Board of Directors of RAO UES of Russia approved the maximum change in its equity interest in WGC-4: from 89.60% to at least 50% plus 1 share.
According to the Board of Directors decision, the representatives of RAO UES of Russia on the Board of Directors and at the General Meeting of Shareholders of WGC-4 were instructed to support the required decisions aiming to carry out the procedure for issuing additional shares in WGC-4 in the amount not exceeding the number of offered shares. In this connection, the Board of Directors instructed the Management Board to submit for approval by the Board of Directors meeting scheduled for October-November 2006 the size of the additional issue of WGC-4 shares, with due account for further development of the financing structure of projects related to the development of generating facilities and with due account for additional capabilities for raising funds aiming to implement the WGC-4 Investment Program. Upon consideration of these issues, the Board of Directors will determine the size for the additionally issued shares in WGC-4 and instruct the representatives of RAO UES of Russia in the Company how to vote on issues related to the size of the additional issue.