5th May 2015 11:25
May 05, 2015
Results of the Board of Directors on April 29, 2015
JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on April 29, 2015.
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The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board - General Director of RusHydro, to provide for the following by June 30, 2015:
1. Development of measures aimed at reduction of operating expenses by not less than 2-3 percent annually as well as determination of target values of implementation of these measures.
2. Inclusion of the list of measures, target values of their implementation and cost reduction target in the long-term development program of RusHydro Group, starting from 2015, in compliance with the provisions of Methodological Recommendations for long-term development programs of strategic joint stock companies and federal state unitary enterprises included in the special lists approved by the Government's guidelines No. 91-r of 2/23/2003 and No. 1060-r of 6/20/2011, as well as open joint stock companies, where the share of the Russian Federation exceeds 50%, as approved by the Instruction of the Government of the Russian Federation No. ISh-P13-2583 of 4/15/2014.
3. Inclusion of operating costs reduction target in the list of Management's KPIs to be considered while making decisions on compensation and personnel decisions, as well as connection between the achievement of operating costs reduction target values and the level of remuneration for management.
4. Inclusion, when necessary, of accomplishment of operating costs reduction target, determined in the long-term development program of the Company, into labor agreement of the sole executive body of the Company.
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The Board of Directors approved the list of investment projects, being implemented or planned for implementation in terms of the investment program of RusHydro, earmarked for technological assessment and price audit in 2015-2016.
The Board of Directors resolved to implement works related to the investment projects listed in the addendum 1 to the minutes, in the amount necessary for development of project documentation in accordance with the Decree No. 87 of February 16, 2008 "On the structure of sections of project documentation and the requirements to its content", and passing through technological assessment and price audit, until NP NTS UES gives positive conclusion of technological assessment and price audit.
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The Board of Directors approved combining positions by George Rizhinashvili, member of the Management Board, First Deputy General Director of RusHydro, and member of the Supervisory Board of RusHydro International B.V.
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The Board of Directors approved a share purchase agreement between JSC Zagorskaya PSPP-2 and JSC RusHydro, qualified as interested party transaction, and determined the price of the agreement in the amount of RUB 9 bn (RUB 1 per one additional ordinary share).
According to the agreement JSC Zagorskaya PSPP-2 will transfer to RusHydro no more than 9 bn ordinary shares to be placed through private subscription, issued in accordance with the company's decision on additional issue of shares registered by the Bank of Russia.
RusHydro will purchase and pay for the shares no later than four (4) working days prior to the end date of placement determined in the decision on additional issue of shares.
Price of transaction: the price of placement of additional shares amounts to one (1) ruble per one (1) additional ordinary registered share.
Form of payment for shares: cash, with the option of offsetting cash claims against the Issuer.
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The Board of Directors approved a share purchase agreement between JSC Nizhne-Bureyskaya HPP and JSC RusHydro, qualified as interested party transaction, and determined the price of the agreement in the amount of no more than RUB 17,111,500,000 (RUB 1 per one additional ordinary share).
According to the agreement JSC Nizhne-Bureyskaya HPP will transfer to RusHydro RusHydro will purchase no more than 17,111,500,000 ordinary shares to be placed through private subscription, issued in accordance with the company's decision on additional issue of shares registered by the Bank of Russia.
Price of transaction: the price of additional shares in the amount of one (1) ruble per one (1) additional ordinary registered share and total par value of no more than RUB 17,111,500,000.
Form of payment for shares: cash, with the option of offsetting cash claims against the Issuer.
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In accordance with article 46 of Regulation on disclosure of information of 30.12.2014 No. 454-P the Company will disclose the details of guarantee agreement, qualified as interested party transaction, in compliance with regulatory requirements.
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The Board of Directors approved an interest-free loan agreements and/or interest-bearing loan agreements (related transactions) JSC Nizhne-Bureyskaya HPP and JSC RusHydro, qualified as interested party transactions, and determined the price limit of the agreements in the amount of RUB 6,306,576,904.08, including:
- loan amount;
- with regard to the interest-bearing loan agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing.
The loan provides for financing of costs of the investment project "Nizhne-Bureyskaya HPP" provided for by the approved Cash Flows of Investment Entity (CFIE).
Terms of the loan: lump sum or in tranches based on the Application of JSC Nizhne-Bureyskaya HPP by transferring funds to the settlement account of JSC Nizhne-Bureyskaya HPP specified in the relevant Application.
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The Board of Directors approved an interest-free loan agreements and/or interest-bearing loan agreements (related transactions) JSC Ust-Srednekanskaya HPP and JSC RusHydro, qualified as interested party transactions, and determined the price limit of the agreements in the amount of RUB 1,409,963,963.67, including:
- loan amount;
- with regard to the interest-bearing loan agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing.
The loan provides for financing of costs of the investment project "Ust-Srednekanskaya HPP " provided for by the approved Cash Flows of Investment Entity (CFIE).
Terms of the loan: lump sum or in tranches based on the Application of JSC Ust-Srednekanskaya HPP by transferring funds to the settlement account of JSC Ust-Srednekanskaya HPP specified in the relevant Application.
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The Board of Directors approved an interest-free loan agreements and/or interest-bearing loan agreements (related transactions) JSC Zagorskaya PSPP-2 and JSC RusHydro, qualified as interested party transactions, and determined the price limit of the agreements in the amount of RUB 2,888,393,150.68, including:
- loan amount;
- with regard to the interest-bearing loan agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing.
The loan provides for financing of costs of the investment project " Zagorskaya PSPP-2" provided for by the approved Cash Flows of Investment Entity (CFIE).
Terms of the loan: lump sum or in tranches based on the Application of JSC Zagorskaya PSPP-2 by transferring funds to the settlement account of JSC Zagorskaya PSPP-2 specified in the relevant Application.
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The Board of Directors approved an interest-free loan agreements and/or interest-bearing loan agreements (related transactions) JSC Leningradskaya PSPP and JSC RusHydro, qualified as interested party transactions, and determined the price limit of the agreements in the amount of RUB 163,328,493.15, including:
- loan amount;
- with regard to the interest-bearing loan agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing.
The loan provides for financing of costs of the investment project "Leningradskaya PSPP" provided for by the approved Cash Flows of Investment Entity (CFIE).
Terms of the loan: lump sum or in tranches based on the Application of JSC Leningradskaya PSPP by transferring funds to the settlement account of JSC Leningradskaya PSPP specified in the relevant Application.
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The Board of Directors approved the following interest-free loan agreements between JSC RusHydro and JSC Small HPPs of KBR, qualified as interested party transactions, and determined the price limit of these agreements:
- Interest-Free Loan Agreement No. OG-156-40-2012 of 6/27/2012: RUB 252,350,000.00;
- Interest-Free Loan Agreement No. OG-156-68-2012 of 9/20/2012: RUB 194,179,100.40;
- Interest-Free Loan Agreement No. OG-172-15-2013 of 9/26/2013: RUB 142,856,135. 88;
- Interest-Free Loan Agreement No. OG-172-19-2013 of 10/25/2013: RUB 170,307,353. 61;
- Interest-Free Loan Agreement No. OG-189-12-2014 of 3/27/2014: RUB 20,752,819.96.
The agreements provide for interest-free loan to JSC Small HPPs of KBR repayable on demand but no later than five (5) working days from the date of receipt by JSC Small HPPs of KBR of the notice of JSC RusHydro on loan repayment.
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The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board - General Director of RusHydro, to provide for the following:
1. Annual analysis of the results of creation of the unified treasury of RusHydro Group;
2. Submission of the report on the results of completed analysis to the Ministry of Finance of Russia and the Federal Financial Monitoring Service on annual basis till September 15, starting from 2015, including:
2.1. Brief information on the results of execution of the government's decree of August 8, 2014, on creation of the unified treasury;
2.2. Information on economic efficiency of creation of the unified treasury and its performance (reduction of operating costs, including costs for external debt service through efficient use of intragroup funding; and increase of return on investments).
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The Board of Directors approved termination of RusHydro's participation in JSC Sibenergosbyt through carve-out of 35,097,700 shares at total price of RUB 10.5 mn in favor of JSC ESC RusHydro. The price of stake has been determined by the independent appraiser based on analysis of market conditions.
RusHydro's share in the share capital of JSC Sibenergosbyt prior to carve-out of shares: 100%.
RusHydro's share in the share capital of JSC Sibenergosbyt after carve-out of shares: 0%.
The shares should be paid no later than 14 days from the date of signing the purchase agreement.
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The Board of Directors commissioned RusHydro's representatives in the Board of Directors of JSC RAO ES of the East to approve the 12-year loan agreement in the amount of RUB 6,613,000,000 between RAO ES of the East and VTB Bank, qualified as a major transaction. The loan provides for financing of construction of the offsite facilities of the Yakutskaya TPP-2 (1st stage).
Price of the Agreement is determined as the aggregate of the following values:
- Loan amount: No more than RUB 6,613,000,000.00;
- One-time fee for providing the credit facility payable at the conclusion of the Agreement: No more than 0.5% of the loan amount;
- Commitment fee: No more than 0.5% per annum to be accrued on undrawn amount of the loan;
- Amount of interest for the use of loan funds accrued at the rate of no more than the maximum interest rate for the person provided with the loan to implement the project selected for participation in the Program for supporting the investment projects implemented within the Russian Federation based on project finance in accordance with the Decree of the Government of the Russian Federation No 1044, dated 10/11/2014, "On Approval of the Program for supporting the investment projects implemented within the Russian Federation based on project finance" (hereinafter, the "Program"), and which shall not exceed the level of interest rate established by the Central Bank of the Russian Federation when providing the authorized banks with loan funds to refinance the loans issued by the authorized banks to end-borrowers (interest rate for specialized refinancing instrument) plus 2.5 percent per annum.
In case the project is excluded from the Program and/or if the Central Bank of Russian Federation does not provide or stops refinancing of loan provided by the Program, the interest rate shall be determined by the Bank unilaterally based on market interest rate indicators.
The maximum price of the agreement amounts to RUB 17,000,000,000.
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The Board of Directors approved the amended Provisions on the procurement policy of RusHydro and recognize as invalid the Regulation on Procurement of Products for the Needs of JSC RusHydro approved by the resolution of the Board of Directors of JSC RusHydro (Minutes No. 139 of 12/2/2011) as amended (Minutes No. 143 of 1/20/2012, No. 158 of 8/10/2012, No. 193 of 2/19/2014, No. 203 of 9/15/2014).
About RusHydro
RusHydro Group is one of Russia's largest generating companies. RusHydro is the leading producer of renewable energy in Russia with over 70 generating facilities in Russia and abroad. The company also manages a number of R&D, engineering and electricity retail companies. Group's thermal assets are operated by subsidiary - RAO Energy System of East in the Far East of Russia. Total electricity generation capacity of the Group is 37.5 GW, heat capacity - 16.2 thousand GCal/h.
Russian Federation owns 66.8% in RusHydro, the rest is held by other institutional and individual shareholders (over 360,000). The company's stock is traded on the MICEX and RTS stock exchanges, and included in MSCI EM и MSCI Russia indexes. Company's GDRs in the IOB section of LSE, ADRs - in OTCQX.
For more information:
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Tel. +7 (800) 333 8000 ext. 1607, 1319, 1304
DISCLAIMER
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. One can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "plan", "aim", "target", "forecast", "project", "should", "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 and political conditions, our competitive environment, risks associated with operating in Russia and rapid technological and market changes in our industries, as well as many other risks specifically related to RusHydro and its operations.
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