According to Kommersant’s information, Rosseti may sell the company’s stake in Inter RAO for 23 billion rubles. and refuse to pay dividends for the same amount in order to finance the construction of electricity networks at the Eastern test site in the coming year. The stake in Inter RAO is being sold below the market value, which, according to current quotes, is regarding 29 billion rubles. The shares can be acquired by structures affiliated with Inter RAO, Kommersant’s interlocutors suggest.
Rosseti, which is in the process of joining the Federal Grid Company, may refuse to pay dividends for 2022 (the state owns 80.72% of the shares) in order to close the gap in financing the construction of power grids for the Eastern Polygon in 2023. The company is also going to receive additional funds by selling its 8.57% stake in Inter RAO. According to Kommersant’s sources, a representative of the Ministry of Energy announced this at a meeting of the government commission on the implementation of projects for the development of the railway infrastructure of Siberia and the Far East on December 27.
Rosseti, in the face of a shortage of investment programs, is building new substations and backbone networks to expand the carrying capacity of the BAM and the Trans-Siberian Railway to 182 million tons by 2024. In total, the state holding was instructed to build 25 power facilities. The head of Rosseti Andrey Ryumin estimated the cost of building a power transmission line for the second stage of the Eastern test site at 250 billion rubles. Measures for additional growth of tariffs, budget money and NWF funds were considered as sources of financing; no decision was made on any of these options.
As a representative of the Ministry of Energy said at a meeting of the government commission, the shortage of funds for the construction of a power transmission line for the Eastern test site until 2025 is estimated at 168 billion rubles, including 58 billion rubles. in 2023.
To cover the deficit, the government decided to exempt Rosseti from paying dividends for 2022, which will release regarding 23 billion rubles. And another 23 billion rubles. the value of Inter RAO shares owned by Rosseti is estimated, the official noted. In 2023, Rosseti intends to allocate 10 billion rubles for the construction of power grids for the first stage of the development of the Eastern test site, and 51 billion rubles for the second stage.
The market value of FGC’s stake in Inter RAO is 29 billion rubles; in recent years, the Ministry of Finance insisted on its sale. The buyer of the package is unknown. Last time, when FGC sold part of its stake in Inter RAO, the shares were bought by the generating company itself.
FGC received a 20% stake in Inter RAO in the course of a “large” additional issue of the company, carried out to consolidate assets in 2011. Then the state-owned Rosatom (13.4%), VEB (5.4%), RusHydro (5.3%) and Gazprom (2%), as well as state energy assets also received shares in Inter RAO Federal Property Management Agency. Norilsk Nickel became the largest private shareholder with 14.2%. In 2012, President Vladimir Putin allowed Rosneftegaz to invest in state-owned fuel and energy companies, following which in 2013 the holding consolidated the shares of the Federal Property Management Agency and Rosatom in Inter RAO.
Other shareholders began to gradually sell their shares. The last time major changes in the composition of Inter RAO shareholders took place in 2018, when FGC got rid of 10% of its shares and sold its entire share to RusHydro.
Now control over Inter RAO is distributed between Inter RAO Capital (an Inter RAO structure, owns 29.56%) and Rosneftegaz (owns 27.63%). The boards of directors of Rosneftegaz and Inter RAO are headed by Igor Sechin.
Rosseti has already refused to pay dividends for 2021 due to the high costs of the Eastern Polygon. The head of Rosseti Andrey Ryumin said that the issue of paying dividends for 2022 would be discussed in 2023 following the merger of FGC and Rosseti.
Rosseti told Kommersant that they might not confirm the information regarding the sale of the stake in Inter RAO. “In order to sell Inter RAO shares, a directive from the Russian government is needed. We have no information that the consideration of such a directive was initiated by anyone or materials are being prepared for its consideration, ”they said, adding that dividend proposals will be considered in April-May 2023. Inter RAO reported that they do not comment on the actions of shareholders, without answering the question of whether the company will buy back its shares from FGC. The Ministry of Energy did not answer Kommersant.
The main contenders for the package in the current conditions are companies affiliated with Inter RAO, Kommersant’s interlocutors in the market believe. However, such a purchase by Rosneftegaz or Inter RAO would increase their stakes beyond the 30% threshold and require a mandatory offer to the remaining shareholders at a price not lower than the transaction price or the six-month weighted average market price. This was the reason why the entire stake in FGC was not sold in 2018.
For Rosseti, the deal is generally neutral – while maintaining the dividend policy of Inter RAO (paying 25% of net profit), there are no prospects for a significant increase in the company’s value, the source of Kommersant believes.
Rosseti’s refusal to pay dividends looks more dangerous for shareholder value – the decision can hardly be called a one-time decision, given the long-term nature of the investments for which it was made. The decision to forego dividends looks reasonable from the state point of view, from which all consumers in the country will benefit, but FGC shareholders will have to pay for it, he concludes.