Russia Questions Plan to Merge Grid Companies, Kommersant Says

Rosneftegaz, Russia’s state company chaired by President Vladimir Putin’s ally Igor Sechin, may lack as much as 600 billion rubles ($19 billion) required to consolidate assets in Russia’s power sector, Kommersant said.

The amount is needed to merge Federal Grid and OAO MRSK Holding and buy out minority shareholders and debt investors opposed to the deal, the newspaper said, citing discussions at Russia’s Economy Ministry last week. The amount also includes increasing the share capital of OAO RusHydro and OAO Inter RAO UES to fund capital spending, it said.

The Economy Ministry proposed to merge the grid companies without Rosneftegaz’s participation and consider alternative proposals for the deal and for boosting RusHydro’s capital, according to Kommersant.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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