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Eastern Europe
July 26, 2019 www.intellinews.com I Page 16
Russia's Rostec agency to issue $1.6bn debut bonds
Russian state technology agency Rostec plans
to issue RUB100bn ($1.6bn) debut bonds on the Moscow Exchange, Vedomosti daily said on July 19 citing the representatives of Rostec. RT-Finance, controlled by the agency, registered a programme of 15-year exchange bonds on Moex.
The funds will be raised to finance projects in Kamaz carmaker, Russian Helicopters and United
Aviation Company, in which Rostec holds shares.
While Rostec can normally count on "consider- able interest from the wide range of investors," analysts surveyed by Vedomosti believe that a only small range of local investors could partici- pate in the issue on account of the specificity of the issuer and Rostec's participation in sanc- tioned projects.
Hydropower major RusHydro’s output down 17% in 2Q19
Russian hydopower holding RusHydro posted an electricity output decline of 16.7% year on year in 2Q19 and of 13% y/y in 1H19 overall.
BCS Global Markets commented that the decline was expected, owing to the strong base effect from 1H18 on the back of high water inflows to the reservoirs of the hydropower plants (HPPs). Previously Rushydro posted a 6.8% y/y decline in Ebitda in 1Q19 under IFRS, below analyst expectations owing to higher operating expenses and lower revenues.
In 2Q19, with breakdown by categories, total production from hydropower and pumped storage plants decreased 20.9% y/y, while total output from thermal power plants increased by 0.8%
y/y. One of the main assets, Boguchanskaya HPP, increased its electricity generation by 7.7% y/y, while the output of Far East subgroup's power plants rose by 1.5% y/y.
Most recently, reports suggested that RusHydro
was discussing a potential utilities asset swap with the structures of Andrei Melnichenko, thereby consolidating DEK that controls
a substantial portion of generation facilities and grids in Russia's Far East.
Reportedly, RusHydro could acquire a 41.84% stake currently controlled by Melnichenko's structures in exchange for a large coal-fired power plant (Primorsk TPP, 1.47 GW, 17% of RusHydro's total Far East fossil fuel generation) and a coal mine (Luchegorsky).
"Transferring problematic Far East assets to other players would decrease the burden that RusHydro carries to operate socially important (but not profitable) assets. Primorsk TPP was not on the list of RusHydro's modernisation projects, so even if the strategy of the potential new owner is to get a modernisation project, it would likely
be a new project and therefore should not affect RusHydro," Sberbank CIB commented on June 14, seeing the news as positive for RusHydro.