October 10, 2016 / 2:51 PM / a year ago

BRIEF-Gazprom energoholding to focus on debt reduction and dividend payment

Oct 10 (Reuters) -

** Russia’s largest owner of power assets Gazprom energoholding intends to focus on reducing debt of its subsidiaries and on dividend payment, its head Denis Fedorov told Reuters in an interview

** Gazprom, which owns three generating companies OGK-2 , Mosenergo, TGK-1 and a thermal energy producer MOEK, has practically completed the main construction of new power plants this year, estimated at over 400 billion roubles ($6.43 billion), and launched 8 gigawatt under power supply agreements

** Due to the investment program Gazprom’s power companies have increased their net debt under IFRS to 152.5 billion roubles at the end of 2015 from 82.4 billion roubles at the end of 2011, of which 72.7 billion roubles falls at OGK-2

** OGK-2 plans to reduce its debt burden in 2016-2017 to acceptable levels - 3-3.5 times, Fedorov said

** According to Fedorov, financial results under IFRS for all three units, OGK-2, Mosenergo and TGK-1, should exceed the 2015 levels. All three power companies are planning to return to shareholders at least 35 pc of profit under IFRS

** The energy holding, which planned to grow through M&A and mulled initial public offering, has decided to postpone the placement as it believes shares of its companies are undervalued

** The holding is not in talks to buy energy assets in Russia, including Reftinskaya GRES, which is planned to be sold by Enel Russia, Fedorov said

** “We are not in talks on participation in acquisition of Russian power companies. Neither power companies, nor power plants”, Fedorov said, adding, that he hasn’t received offers to buy Mikhail Prokhorov’s generating company Quadra nor hasn’t been negotiating with Viktor Vekselberg’s T Plus after the rejection of the deal in 2012

** Fedorov sees potential for new investments in the Russian energy sector - in the worn-out thermal power networks, having proposed to the Ministry of Energy adopting a similar mechanism to the power supply agreements in order to attract investors

** According to the holding’s estimates the networks in Saint Petersburg, owned by its unit, are worn-out in 87 percent and require annual investments of 9 billion roubles. In Moscow thermal networks owned by MOEK are worn-out in 68 percent and need 25 billion roubles of annual funding

For further company coverage,, For the story in Russian, click ($1 = 62.2255 roubles) (Reporting by Anastasia Lyrchikova in Saint Petersburg, translated by Gdynia Newsroom)

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