Russia UES break-up approved, few buyouts needed

By Olga Popova

MOSCOW, Oct 30 (Reuters) - Shareholders of Russia's power monopoly Unified Energy Sistem (UES) EESR.MM, have backed a final break-up plan, freeing the firm from the need to spend extra money to buy out minorities, the head of UES said Tuesday.

"The attendance at the meeting was more than 75 percent (of voting shareholders), meaning that the main decision was passed. In line with that, UES will cease to exist from next July 1," chief executive Anatoly Chubais told reporters.

UES has already set aside 102 billion roubles ($4.12 billion) to buy out investors who voted against the plan at an extraordinary shareholders' meeting last Friday.

Chubais said UES would not have to spend more than this sum on the buyouts because the number of takers among UES's 350,000 shareholders would be small.

"We are absolutely ready to buy out the entire amount that shareholders want to sell," he said, adding added that investors will want to hold on to their shares in light of the growing capitalisation of the companies those shares represent.

UES is being broken up into dozens of smaller companies, separately dealing in the generation, distribution and sale of electricity.

UES shareholders will get pro rata stakes in these companies, whose underlying assets are currently worth more than their market valuations, analysts say.

Other investors, mostly strategic, are being given the opportunity to buy up new shares in these companies, especially the 20 generating firms known as OGKs and TGKs that are issuing billions of dollars in new stock.