OAO RusHydro (RSHYY) fell on a report that Russia’s largest hydropower company may hold a secondary public share sale to allow Rosneftegaz to acquire a 40 percent stake in OAO Irkutskenergo from OAO Inter RAO UES.
RusHydro fell 1.8 percent to 87.56 kopeks by 10:42 a.m. in Moscow, the first drop in three days and the biggest decliner on the Micex Index.
“We believe this news will be taken quite negatively by RusHydro minorities,” Alfa Bank analysts led by Alexander Kornilov said in an e-mailed note. “First of all, the volume of the share placement in favor of Rosneftegaz is expected to be huge, 40 percent of the current market cap of RusHydro. Secondly, the pricing parameters of the placement are unclear at the moment, which might imply a substantial dilution risk for current minorities.”
Rosneftegaz may acquire RusHydro’s 40 percent stake in Irkutskenergo from Inter RAO UES through a subsidiary, Kommersant newspaper reported, citing people familiar with the plan. Rosneftegaz may then transfer the stake in Irkutskenergo and invest 85 billion rubles ($2.62 billion) for a 25.8 percent stake in RusHydro, for which the company would have to issue additional shares, Kommersant reported.
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