September 15, 2007 / 1:47 PM / 12 years ago

Gazprom buys stake in power generator TGC-1

MOSCOW, Sept 15 (Reuters) - Russian gas monopoly Gazprom (GAZP.MM) has paid 71.1 billion roubles ($2.8 billion) to acquire effective control of power generator TGC-1 (TGKA.MM), the country’s former power monopoly said on Saturday. Unified Energy System (UES) EESR.MM said Gazprom had bought part of the state’s stake in TGC-1 and half of a package of new shares in the company that supplies power to the city of St Petersburg.

Should Finnish utility Fortum FUM1V.HE choose to retain its blocking share in TGC-1, Gazprom would end up with a 47 percent stake in the company. It is then widely expected to offer to buy out minority shareholders, a source close to the deal told Reuters. The state has retained a 13.6 percent stake in TGC-1.

Igor Artemyev, head of the Federal Anti-Monopoly Service, told the Reuters Russian Investment Summit earlier this week that the watchdog was most likely to allow Gazprom to buy TGC-1, but added that Gazprom’s power sector appetites were being “carefully watched.”

TGC-1, one of over a dozen new regional power companies created under sector reforms to create a competitive electricity market, exports some of its power to Finland and Norway.

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