OAO MRSK Holding surged the most in five months as the nation’s largest electricity distribution company announced its restructuring plan for OAO Russian Grids.
MRSK Holding jumped as much as 6.7 percent, the biggest intraday advance since Nov. 6, and added 3.8 percent to 1.575 rubles by 3:10 p.m. in Moscow. The amount of shares traded was about 251 million, equivalent to 1.6 times the three-month average. MRSK was the biggest gainer on the benchmark Micex Index, which was little changed at 1,417.96.
The board of directors of Russian Grids, formerly MRSK Holding, approved issuing an additional 161 billion shares at 2.79 rubles a share, which can be paid for in cash or swapped for Federal Grid Co. shares at 28.36 kopeks a share, according to today’s regulatory filing. Russia will exchange its ordinary shares of Federal Grid for new shares of Russian Grids and will hold 86 percent in Russian Grids as a result, according to the filing.
“Valuations bring long-awaited clarity on grid consolidation,” UralSib Capital analysts said in an e-mailed note.
President Vladimir Putin in November signed a decree transferring 79.55 percent of Federal Grid’s shares to MRSK Holding. The merged company was renamed Russian Grids or OAO Rossiskiye Seti, according to the document.
Federal Grid rose as much as 3.5 percent before trading down 1.1 percent at 14.85 kopeks. Federal Grid will become a unit of Russian Grids and its shares will continue to be listed and trade on the Moscow Exchange, according to the statement.
“The market has realized that after the restructuring Federal Grid will be a subsidiary of Russian Grids,” Igor Goncharov, an analyst at BCS Financial Group, said by phone from Moscow. “Traditionally, shares of subsidiary companies are a riskier investment.”