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PJSC DEK’s shareholders concluded asset swap

June 05, Moscow, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces conclusion of the asset swap transaction between RusHydro Group and Far East Energy Company’s (PJSC DEK( minority shareholders including JSC SUEK.

The swap deal of Luchegorsky coal mine and its technically connected Primorskaya GRES, RusHydro’s non-core assets, for minority shareholders’ 41.98% stake in the share capital of PJSC DEK, a company which owns Far Eastern Generating Company (DGK) and Far Eastern Power Distribution Network (DRSK), has been approved earlier by RusHydro's Board of Directors and Federal Antimonopoly service of the Russian Federation.

Reduction of DGK’s leverage by conversion of its loans before RusHydro into the share capital of DGK was among the goals of the transaction. Following the asset swap, the power generating company’s financial health will improve as its RUB 40 bn debt will be capitalized and its leverage will consequently decrease by 50%.

Nikolay Shulginov, Chairman of the Management Board – General Director of RusHydro commented: “This deal along with introduction of economically viable long term tariffs in the non-price zones of the Far East will greatly improve DGK’s financial performance allowing the company to focus on its operations and modernization to ultimately improve reliability of power supply”.

Stepan Solzhenitsyn, General Director of JSC SUEK added on behalf of minority shareholders: “SUEK is regarded by many in Primorye and in the Far East in general as a local company. We are actively investing in production development, including coal-powered electricity generation, and contributing to quality of life improvement in the cities of presence. We are sure the deal will have a positive effect on further development of the region.”

PJSC RusHydro’s share in DEK and, consequently, DRSK increased to 94.1%. DGK now owns three new power plants in region: Blagoveshenskaya CHPP (2nd phase), Vostochnaya CHPP and CHPP in the city of Sovetskaya Gavan. Tariff revenue from the power plants will be an additional source of financing of DGK’s operations.

Upon commencement of the deal, minority shareholders withdrew from DEK and acquired Luchegorsky coal mine and Primorskaya GRES. 

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