"Expert RA"

Reform of ratings and lists

March, 28th, 2008

In view of the coming reorganization Expert RA revokes corporate governance ratings of six net distribution companies: OAO Arkhenergo, OAO Komienergo, OAO Karelenergo, OAO Kolenergo, OAO Novgorodenergo and OAO Pskovenergo. As of April 1, 2008 the companies would join OAO MRSK North-West as subsidiaries and lose the status of legal entities. The reorganization decision was taken by the board of directors of OAO RAO UES of Russia and later approved by extraordinary shareholders’ general meetings of the net distribution companies. MMVB stock exchange already stopped selling shares of companies in the area of responsibility of MRSK North-West. In the beginning of 2008 OAO RAO UES of Russia set conversion ratios for the acquired companies, which was followed by the decision of FSFM to allow additional emissions of securities to OAO MRSK North-West.

“The RAO UES of Russia reform would strongly influence our rating list as well as the list of the largest Russian companies. The list of 200 largest Russian companies (capitalization) will be renewed by one third in 2008, accompanied by multiple reduction of energy companies (85 – in 2006, 76 – in 2007). Many of them would become part of corresponding TGK and MRSK or join OAO GidroOGK. RAO UES of Russia – once the most liquid “blue chip” – would leave the stock exchange scene, too. Expert 400 (largest revenues) electric energy sector, formerly consisting of 7 companies, would, on the opposite, contain many more generating, net and distribution companies”, – Stepan Zhulin, Expert RA, corporate governance service, says about the liquidation consequences of RAO UES of Russia.