Italy's Enel pays $1.5 billion to take majority stake in Russian power company

07 March 2008

Mumbai: Enel SpA, Italy's biggest power utility, has raised its stake in Russian power generation group OAO OGK-5 to 59.8 per cent from 37.2 per cent earlier.

Enel, based in Rome, said it paid 35.5 billion rubles ($1.5 billion) in an open offer for the Russian power generation company, valuing OAO OGK-5 at around 4,427.50 roubles per share, about 7 per cent more than the closing price the day before the tender was announced.

"It is a strategic presence for Enel in one of the largest markets undergoing liberalisation in the world, one with excellent prospects for the profitability of our investments," Enel CEO Flavio Conti said in a statement.

The Italian group was forced to make a public offer after it crossed the 30 per cent threshold last year in two separate transactions.

OAO OGK-5 has generating capacity of 8,672 megawatts with one plant each in central Russia and southern Russia and two in the Ural Mountains.

OGK-5 reported revenues of.75 billion roubles and net income of 1.2 billion roubles in the first half of 2007.