The head of Russia’s electricity monopoly Unified Energy Systems (UES) said in an interview he would recommend to the UES board in 2008 the sale of a blocking stake in Russia’s largest turbine maker and hydropower equipment supplier Power Machines.
UES currently owns 25 percent plus one share of loss-making Power Machines which it bought last year for US$101.4 million from previous owner Interros, a Russian industrial group controlled by metals billionaires Vladimir Potanin and Mikhail Prokhorov.
UES Chief Executive Anatoly Chubais said in a December 5 interview with Kommersant business daily, that his company had regarded the Power Machines investment as strategic. He said Power Machines’ market capitalization had grown to US$1 billion from US$400 million at the time of the UES stake purchase last year.
�This shows that from a financial point, we have already been compensated,� Chubais said. �In 2008 I will propose to the UES board of directors the sale of the Power Machines stake.�
Germany’s Siemens AG also owns a 25 percent plus one share stake in Power Machines and Interros Holding holds 30.4 percent which UES manages, with the remainder held by minority investors. UES also acquired voting rights for the Interros stake last year, effective through to 2007.
UES is backing a planned additional share issue by Power Machines. (HNN 11/27/06) Russian media said the issue would represent 30 percent of the capital of Power Machines. Chubais told Kommersant the offering would be worth a minimum of US$300 million.
Power Machines in 2005 made a net loss of US$40.5 million, having made a net profit of US$10.2 million the previous year.
Siemens had bid to take over Power Machines outright but its bid was thrown out earlier in 2005 by Russia’s anti-monopoly body because of national security concerns, as Power Machines produces military equipment.