Results of the Board of Directors on November 11, 2016
November 15, 2016. Moscow, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on November 11, 2016.
The Board of Directors commissioned RusHydro’s representatives in the Board of Directors of JSC ESC RusHydro:
ESC RusHydro share in the charter capital of LLC ESCB as a result of transactions will decrease from 100% to 0%.
Divestment of LLC ESCB is in line with the updated Company’s strategy, which envisages efficient sale of a number of assets, and will allow RusHydro to get additional funds to finance its priority activities, including implementation of the investment projects.
The Board of Directors reviewed information on measures aimed at improving efficiency of implementation and control over major construction of power facilities in the Far East, as well as measures related to persons responsible for construction of projects. The Board of Directors approved delegation of powers of sole executive bodies of JSC Sakhalinskaya CHP-2, JSC TPP in Sovetskaya Gavan’, JSC Yakutshaya CHP-2 to a management company UC HydroOGK (wholly owned by RusHydro) and independent exercise of rights over subsidiaries’ shares by RusHydro.
The Board of Directors commissioned Nikolay Shulginov, Chairman of the Management Board – General Director of RusHydro, to return rights over shares that had been transferred in trust management of PJSC RAO ES East to PJSC RusHydro within two weeks.
Implementation of these measures will allow RusHydro to control and manage the construction of generating facilities in the Far East, and will make JSC UC HydroOGK responsible for construction and commissioning of projects.
The Board of Directors approved an addendum to trust management agreement between PJSC RusHydro and PJSC RAO ES East, qualified as interested party transaction. In accordance with the addendum RAO ES East should return shares of JSC Sakhalinskaya CHP-2, JSC TPP in Sovetskaya Gavan’, JSC Yakutshaya CHP-2 to RusHydro.
The Board of Directors commissioned RusHydro’s representatives in the Annual General Meeting of shareholders of JSC Sakhalinskaya CHP-2 to approve the increase in the charter capital and additional issue of 2,016,480,000 ordinary shares of JSC Sakhalinskaya CHP-2 with par value of RUB 1 per share.
The Board of Directors approved acquisition of additional shares of JSC Sakhalinskaya CHP-2 by RusHydro and determined the price of these shares in the amount of up to RUB 2,016,480,000. The price of placement is RUB 1 per share.
The shares are placed through a private subscription. RusHydro’s share in JSC Sakhalinskaya CHP-2 will remain unchanged and amount to 100%. The transaction is aimed to finance the construction of the 1st stage of the Sakhalinskaya CHP-2.
The Board of Directors resolved to make the amendments to Regulations on procurement of products for RusHydro’s needs.
The Board of Directors commissioned RusHydro’s representatives in the governing bodies of JSC Zaramagskie HPPs, JSC ChirkeyGESstroy, JSC Hydroinvest to approve alienation of RusHydro’s shares in favor of JSC Hydroinvest.
The Board of Directors also resolved to consider it expedient that RusHydro takes in pledge the following stakes:
The shares are alienated at the weighted average price determined based on the results of trading during the date of transaction.
The Board of Directors commissioned RusHydro’s representatives in the governing bodies of JSC Hydroinvest to approve a share pledge agreement, qualified as major transaction.
In accordance with the agreement, JSC Hydroinvest pledges to RusHydro up to 13,384,018,910 RusHydro’s ordinary shares to guarantee its liabilities under a loan agreement. JSC Hydroinvest secured loan funds from RusHydro in the amount of RUB 250 mn to finance acquisition of RusHydro’s shares from JSC Zaramagskie HPPs and JSC ChirkeyGESstroy.
The Board of Directors commissioned RusHydro’s representatives in the Board of Directors of PJSC RAO ES East to approve the increase in the charter capital of PJSC RAO ES East through placement of 568,077,321 additional shares with par value of RUB 0.5 per share.
The shares will be placed through open subscription. The funds raised through additional issue of shares will be used to finance the construction of 220 KW electric power substation in Yakutia.
The Board of Directors elected the following 13 members to the Strategy Committee:
The Board of Directors elected Igor Zadvornov as Head of the Strategy Committee.
The Board of Directors terminated powers of Maxim Zavalko as corporate secretary and elected Natalya Kovaleva as corporate secretary.
The Board of Directors approved a contract of real estate lease between PJSC RusHydro and PJSC FGC, qualified as interested party transaction, and determined that the price of the lease for the entire period of contract (from March 1, 2016 through January 31, 2017) is RUB 1,742,511 (including VAT of RUB 265,806). In order to use its 220-500 KW transmission towers, located on facilities of Zhigulevskaya HPP, PJSC FGC has to lease parts of hydropower facilities from PJSC RusHydro.
The Board of Directors approved termination of PJSC RusHydro participation in JSC Malaya Dmitrovka and at the same time approved participation of RusHydro in JSC ServisNedvizhimost RusHydro (JSC SNRG) via contribution of 100% shares of JSC Malaya Dmitrovka to its authorized capital.
The Board of Directors commissioned representatives of PJSC RusHydro in the governing bodies of JSC Vedeneyev VNIIG to approve related transaction aimed at purchase of share in JSC SNRG via contribution of JSC Vedeneyev VNIIG in the charter capital of JSC SNRG.
The transactions are being implemented pursuant to RusHydro’s concept for establishing a single real estate management center within the Group.
The Board of Directors approved sale and deed of gift in reference to pieces of real estate (apartments) located in the town of Talakan, Bureysky district of Amur region. The apartments were built as a part of construction of the Bureyskaya HPP during the period from 2000 to 2003 for personnel of the HPP. The property is included in the list of non-core assets of RusHydro.
The Board of Directors approved a standard collective labor agreement of PJSC RusHydro branch for 2017-2019 and instructed Nikolay Shulginov, Chairman of the Management Board - General Director of PJSC RusHydro, to implement signing of collective labor agreements in branched of RusHydro.
The new edition of the standard collective labor agreement has been developed in order to reflect changes in the Russian legislation related to labor protection and optimization of social costs in the light of recommendations based on the audit of RusHydro Group costs.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.