July 25, 2008

EBRD buys OGK 5 stake from Enel – Report

RIA Novosti reported that the European Bank for Reconstruction and Development has bought a 4.1% stake in OGK 5 from a subsidiary of Italy's Enel and will now control 5.2% of the Russian wholesale generating company.

Enel Investment Holding BV a wholly owned Dutch subsidiary of Enel SpA will sell the minority stake to the EBRD, which bought a 1.1% stake in OGK 5 in November 2006, for a consideration of about EUR 175 million at the current euro/ruble exchange rate.

The EBRD said the purchase was one of its largest investments in a Russian power company.

Enel said that “After the deal, EIH will retain about 55.8% of OGK 5's share capital, sufficient to ensure effective control over the company through the power to nominate the majority of the members of its board of directors.”

The parties also signed an agreement under which EIH will transfer to OGK 5 advanced international practices in environmental protection and introduce corporate governance principles to protect the rights of OGK 5's minority shareholders.

OGK 5 has four subsidiaries and produces a total of 8,672MW of electricity. The Russian government holds a 26.43% stake in the company.