INTER RAO UES to sell 26.43% of Enel OGK-5 to a consortium of investors

According to the deal structure INTER RAO UES will receive a fixed amount of USD 625M at closing of the sale and will also participate in future proceeds of the Consortium exceeding 18% of the base level of return from the investment. INTER RAO UES will receive the full amount of such excess proceeds up to USD 125M as well as a 20% share in proceeds further above. The transaction will be completed after accomplishing relevant corporative procedures and receiving approvals of regulatory authorities.

INTER RAO UES plans to spend the proceeds from the transaction on funding its investment program, which if focused on building power generating facilities in Russia in order to perform its power delivery contracts.

This deal is one of the largest private equity transactions in the history of the Russian energy sector. The investment consortium will become a partner of Italian corporation Enel S.p.A., the majority shareholder of Enel OGK-5.

”Inter RAO strictly follows its development strategy 2015, and the sale of its blocking stake in Enel OGK-5 is fully in line with the strategy’s approach to dispose of assets,” said Inter RAO Chairman of the Management Board Boris KOVALCHUK. “We are confident that the withdrawal of Inter RAO from the shareholder’s structure of Enel OGK-5 will not affect our partner relations with Enel Group and we will continue our cooperation on a wide range of issues”.

“The RDIF is partnering with some of the most sophisticated international and Russian investors to acquire a material interest in the premium asset on the Russian power market,” said Kirill DMITRIEV, Chief Executive Officer of the Russian Direct Investment Fund. “This investment is a robust endorsement of investor sentiment toward the Russian utilities industry and further demonstration of the appeal of Russia’s growing economy to international investors.”

“Enel OGK-5 is a superior asset, with low leverage, strong fundamentals and a world-class partner in Enel,” said Natasha TSUKANOVA, Founder and Managing Director of Xenon Capital Partners. “Hence, we were delighted to act as investor in this transaction, which highlights our capabilities to facilitate and attract high quality institutional investors with longer term investment horizons.”

Chief Executive Officer of the Macquarie Renaissance Infrastructure Fund, Damian SECEN, said: “MRIF is delighted to have acquired a major stake in Enel OGK-5. This is a high quality infrastructure asset with a capable and professional management team in place, and represents an excellent opportunity for MRIF to participate in this fundamental sector of the Russian economy.”