UPDATE 1-RusHydro raises 9.2 bln roubles in share sale

* Exisiting shareholders buy 42 pct of the offer

* RusHydro raises 9.2 bln roubles

* Offering price 20 pct below mkt price

* Company may buy some of remainder itself

(Adds details, background)

MOSCOW, July 9 (Reuters) - State-controlled RusHydro (HYDR.MM), Russia's largest hydroelectric power producer, raised 9.2 billion roubles ($298 million) by selling new stock to existing shareholders to help fund repairs following a deadly dam flood.

RusHydro runs the Sayano-Shushenskaya dam, Russia's largest hydro-electric power station, where a turbine room flood killed 75 people in August 2009. The company previously said it planned to finance some of the repairs through a share issue. [ID:nLI102944]

Shareholders exercised pre-emptive rights to buy 7.98 billion shares or 42 percent of the 19 billion offered, the company said in a statement on Friday. The government owns 60.4 percent of RusHydro.

The public offering took place at 1.15 roubles per share, a discount to RusHydro's closing price of 1.55 roubles, giving investors an incentive to snap up any surplus unpurchased by the existing owners.

However RusHydro has warned it plans to use the right not to meet all the offers in order not to allow existing shareholders to be diluted.

In past share placements, RusHydro has also bought some of the stock itself to hold as treasury shares, reserving the right to sell when market conditions improve or use the stock in any possible deals with other companies.

"This means nothing for the stock price. Most of the shares will be bought by the company itself, so they can remain in control," an analyst from a major investment fund said.

The utility company came under heavy criticism from Russian Prime Minister Vladimir Putin for having chronically underinvested in dam modernisation. (Reporting by Ben Judah and Anastasia Lyrchikova; Editing by Dmitry Sergeyev and David Holmes) ($1=30.85 Rouble)