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28 Apr, 2008 06:38

The future of electricity

Experts have announced April 30 as the estimative day to exclude the common and preferred shares of RAO UES from market indexes due to the reorganisation of the electricity giant. The split of the monopoly and government’s promised step towards an open el

RAO UES is one of the most popular issuers both on the RTS and MICEX stock exchanges.

The holding has previously announced it will close the register of shareholders on June 6. The reorganisation is to end on July 1.

The current RAO UES shares will be replaced by common shares that will be replaced by the shares of the generating companies separated from of the energy giant.

TASS news agency has quoted the trustee of RAO as saying the holding’s shareholders will own the stocks of its split-off companies from July 1. Nevertheless, that has left some minority shareholders confused.

“A lot of private investors are not sophisticated enough to differentiate between different assets that they will end up owning sometime in July,” an expert from Marcuard Spectrum told RT.

On the other hand, most shareholders remain optimistic about the potential of the OGK and TGK generators.

“The value of these subsidiaries is 35 to 40 per cent higher than the value of the holding structure UES and basically this discount that's applied to the UES will be realised after the shares are converted into subsidiaries,” the expert has assured.

Russia’s utility sector is still very much undervalued compared to Europe’s. Generating capacity is valued at $US 250-300 per kilowatt making up at least a third of Europe’s average.

But some analysts incline to the view that if the government opens up the electricity market to competition and allows some return on equity, the investors will not keep out.