Company history↓
Electric power industry reform. Goals and objectives.
Over the last years, the Russian electric power industry has undergone considerable changes: new legal and regulatory framework is being shaped, the structure of the industry is changing, the division of natural-monopoly (power transmission, regulatory & dispatch monitoring) and potentially competitive (electricity generation and marketing, repair & maintenance) functions are taking place, and a competitive electric power market is taking shape. Thus, Russia is following the track of the majority of highly developed states, which are now carrying out or have already carried out reform of their electric power industries, in an effort to adapt it to the conditions of the present-day economy.
Goals and objectives of the Reform were set out in Russian Government Decree as of July 11, 2001 “Restructuring the Electric Power Industry of the Russian Federation”. With regard for further amendments in the regulatory and legal framework, the goals and objectives of the Reform were precisely identified in the “Strategy Concept of the RAO UES of Russia for 2005-2008 “(5+5)”.
The prime target of the reform is to upgrade the efficiency of the industry companies, to create conditions for its development based on incentives for investment, to provide reliable and uninterrupted supply of power to consumers.
One of the most important stages on this way is establishing of big integrated generation companies the mission of which is to become key players on the wholesale market of electric power, to make use of all the advantages of such enlargement and, in the long run, to attract private investors’ funds for renovation of the industry and upgrading its efficiency.
Company Birth
In accordance with the general strategy of the reform, on 1 October, 2004, the Board of Directors of the RAO UES of Russia took a decision to establish the Open Joint-Stock Company Third Generation Company of the Wholesale Electricity Market (JSC WGC-3), which was set up in the form of a holding company (100% affiliated and dependent company of the JSC RAO UES of Russia) by contributing into the authorized capital the share blocks of the following federal power plants: JSC Gusinoozersk SDPP, JSC Pechora SDPP, JSC Kostroma SDPP, JSC Kharanor SDPP and JSC Cherepets SDPP.
On 2 September, 2005, the Board of Directors of the JSC RAO UES of Russia specified the number and nominal value of the authorized stock and took the decision to increase the authorized capital through private offering. The limiting number of the authorized stock amounted to 14,144,628,100 shares, the nominal value of one share being 1 ruble.
The state registration of the JSC WGC-3 took place on 23 November, 2004, with the Interdistrict Inspectorate of the Russia’s Ministry of Taxation in the Republic of Buryatia. From that day the Company in fact started its intensive work: that day is considered to be the Company foundation date.
Conversion to single share
The next important stage in development of the JSC WGC-3 became the conversion to a single share which was carried out by means of conversion of the shares belonging to minority shareholders of JSC Kostroma SDPP, JSC Pechora SDPP, JSC Cherepets SDPP, and JSC Yuzhnouralsk SDPP, into additional JSC WGC-3 shares.
As had been assumed based on the reform timeline, the conversion of the JSC Gusinoozersk SDPP, JSC Pechora SDPP, JSC Kostroma SDPP, JSC Kharanor SDPP, JSC Cherepets SDPP, and JSC Yuzhnouralsk SDPP shares to the additional issue shares of the JSC WGC-3 took place until 15 December, 2005. As a result, the share of the actually placed securities from the total number of the additional issue shares reached 77.61 percent, at the same time the number of Company minority shareholders grew to 36 percent.
The approximate date of accomplishing all the corporate procedures on conversion of the JSC WGC-3 companies to a single share is the end of the 4th quarter of 2005.
Setting-up of Unified Operating Company
In March-April 2006, the third, and at the same time, the last stage of the reorganization should be finished: consolidation of the JS power generating plants with the parent company. From then on they will be active in the capacity of the JSC WGC-3 affiliates (separate subdivisions).