20.06.2013
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Results of the Board of Directors on June 19, 2013

JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on June 19, 2013.


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The Board of Directors elected Mikhail Poluboyarinov, First deputy chairman, member of the Management Board of Vnesheconombank, as a Chairman of the Board.


Mikhail Poluboyarinov graduated from Moscow Finance Institute in 1988. In 1998 graduated from the postgraduate school of the Plekhanov Academy of Economics, has PhD in Economics.


Since 2009 Mikhail Poluboyarinov has been working in the State Corporation Vnesheconombank, since October 2012 as the First Deputy Chairman. Prior to joining Vnesheconombank Mr Poluboyarinov held a position of a Chief Accountant (from 2000 to 2003) and Deputy CEO (from 2003 to 2009) at Aeroflot.


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The Board of Directors approved acquisition of stakes of the following companies:


Company

Max. number of shares

Type of shares

Price per share

Share before acquisition

Share after acquisition

JSC Malaya Dmitrovka

1,019,782,000

Ordinary

RUR 1

100%

100%

Hydroengineering Siberia

1,991,979,300

Ordinary

RUR 1

100%

100%

Dalnevostochnaya WPP

223,588,474

Ordinary

RUR 1

100%

100%

Hydroinvest

9,550,000,000

Ordinary

RUR 1

100%

100%

ESC RusHydro

18,368,431,368

Ordinary

RUR 1

100%

100%

Ust-Srednekanskaya HPP

9,869,837,908

Ordinary

RUR 1

35.21%

tbd

Geotherm

1,596,250,051

Ordinary

Share price to be determined by an independent appraiser

92.8%

tbd

Zaramagskie HPPs

15,311,790

Ordinary

RUR 1,000

98.35%

tbd

Small HPPs of Kabardino-Balkaria

2,239,241

Ordinary

RUR 1,000

-

tbd

The Board of Directors approved the additional share issue of the following RusHydro’s subsidiaries: Dalnevostochnaya WPP, Hydroengineering Siberia, Hydroinvest, ESC RusHydro, Ust-Srednekanskaya HPP, Geotherm, Zaramagskie HPPs, Small HPPs of Kabardino-Balkaria.


These share issues are committed to financing current debt of the companies listed above to RusHydro and will represent a transfer of funds from subsidiaries to the parent company.


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The Board of Directors approved participation of RusHydro in the non-commercial partnership ‘Innovative research and development club’ (iR&Dclub). This membership will allow RusHydro to study best practices of other companies and participate in elaboration of state regulations in terms of innovative development.


The Club was set up in 2011 at the initiative of big business and state corporations on the basis of Institute of management innovations R&D University HSE (Higher School of Economics) with the support of Economic Development Ministry, Ltd. RVC (Russian Venture Company) with the participation of R&D University HSE and Moscow School of Management SKOLKOVO. The Club is aimed at improvement of innovative processes in Russian companies and development of innovative culture in the country.


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The Board of Directors approved the agreement between RusHydro and the Federal Agency for state property management on gratuitous transfer of property located nearby the Company’s Sayano-Shushenskaya HPP, qualified as interested-party transaction.


The Board of Directors approved the agreements between RusHydro and Lenhydroproject, qualified as interested-party transactions:

  • The agreements on development of project documentation for comprehensive reconstruction of the Votkinskaya and Zeyskaya HPP, included in the investment program of RusHydro. 
  • The agreement for R&D and technological works and research of hydropower potential of the Angara river basin.

The Board of Directors approved the agreement between RusHydro and National Research University "Moscow Power Engineering Institute", qualified as interested-party transaction, and determined the price of works under agreement. The subject of the agreement is R&D and technological works aimed at reliability improvement of hydroturbines.


The Board of Directors approved the agreement between RusHydro and System Operator of Russia, qualified as interested-party transaction, and determined the price of works under agreement. According to the agreement RusHydro will control the reactive capacity without electricity production using generating facilities of the Volzhskaya, Votkinskaya, Kamskaya, Ezminskaya, Gizeldonskaya, Zelenchugskaya HPPs and Zagorskaya pumped storage plant.


The Board of Directors approved the agreement between RusHydro and FSK EES, qualified as interested-party transaction, and determined the price of works under agreement. According to the agreement FSK EES will transfer to RusHydro project documentation and shunt reactor under reconstruction project of 200/500 kW outdoor switchgear of the Zeyskaya HPP.


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The Board of Directors approved participation of RusHydro in the joint venture (JV) “VolgaHydro” LLC, aimed at manufacturing of hydroturbine equipment, established together with Voith Hydro. The JV will be located in Russia.


RusHydro’s share in the share capital will be 50% plus RUR 1 share, the share of Voith Hydro will be 50% minus RUR 1. The share capital will be equally paid by the companies (EUR 100 thousand at the exchange rate of the Central Bank of Russia).


The Board of Directors approved the agreement between RusHydro and Voith Hydro and commissioned the Company’s representatives in the management bodies of the JV to vote for decisions related to implementation of the agreement.


In 2011, the Board of Directors approved the agreement with Voith Hydro for comprehensive modernization of hydroturbines of the Saratovskaya HPP and establishment of a JV for these purposes. The JV will also manufacture the equipment for other plants in Russia and CIS.


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The Board of Directors approved report on execution of the Company’s KPIs in the first quarter of 2013.


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The Board of Directors approved the report on interim results of 2013 business-plan execution in the first quarter of 2013 (including report on implementation of capex program, comprising report on implementation of generating facilities modernization program).


Electricity generation and output by RusHydro’s power plants in the 1st quarter of 2013 totaled 122% and 123% of the planned volumes respectively. The slight overshoot was a result of favorable hydrological conditions and regimes allowed by the Federal Water Resources Agency.


The financing of investment program in the first quarter of 2013 amounted to RUR 12.39 bn (including VAT) or 109% of the plan for the quarter.


Financing of rehabilitation and modernization projects in the first quarter of 2013 amounted to RUR 3.82 bn or 143% of the plan for the quarter. The overshoot was due to early delivery of the equipment and completion of works.

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.
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