07-07-2005
Bloomberg

The owners of ZAO Integrated Energy Systems, which is controlled by Russian billionaire Viktor Vekselberg, bought stakes in OAO Kirovenergo and OAO Udmurtenergo they seek to form a regional power utility.

Integrated Energy Systems"s owners also bought units of Kirovenergo and Udmurtenergo, the Moscow-based company said in an e-mailed statement today. The company didn"t say how large the stakes were or give information on the prices paid.

Intergraded Energy, established in 2002, is buying stakes in regional energy companies as Russia breaks up the industry to attract billions of dollars in investment.

Russia is splitting up 72 regional utilities owned by national utility RAO Unified Energy System into their underlying assets and merging them into larger generation, transmission and distribution The reorganization will lead to the creation of 14 territorial generation companies. Kirovenergo and Udmurtenergo will become part of Territorial Generation Company No. 5, along with OAO Marienergo and OAO Chuvashenergo.

The owners of Integrated Energy Systems acquired the shares at the end of June and have called shareholders meetings to get their representatives elected to the companies" boards, Integrated Energy said today.