Page 137 - RusRPTSept22

similar increases in the cost of electricity
A presidential decree prohibiting shareholders from “unfriendly” countries from leaving the financial sector and fuel and energy companies until the end of the year froze the sale of Russian assets of energy companies Fortum and Enel, Kommersant reports.
The already announced deal of the Italian Enel was in the greatest readiness. The group hoped to sell its 56.43% stake in Enel Russia (three state district power plants for 5.6 GW and two wind farms) to Lukoil and the Gazprombank-Freesia fund for €135mn - below the market price.
The sale of the generating company Fortum to the Finnish Fortum was blocked back in July, writes Kommersant. At that time, Fortum had proposals from Gazprombank, AFK Sistema and Invest AG Alexander Abramov and
Alexander Frolov, the publication claims, despite the complex structure of assets and the difficult financial condition of Fortum. The buyers even agreed to the demand to pay off Fortum's debt to the parent company for about RUB75bn ($1.1bn).
The third Western energy giant with assets in Russia is the German Uniper. The main shareholder of Uniper is the same Fortum, and its Unipro in Russia has five state district power plants for 11 GW. Uniper talked about leaving Russia, but did not collect applications for Unipro assets, although top management negotiated with Gazprom Energoholding, Inter RAO and AFK Sistema, Kommersant writes.
The full list of "frozen" companies who are not allowed to sell their assets and leave Russia in accordance with Putin's decree is due to be released in the coming weeks, and it will include not only energy companies, but also banks. It was expected that the restrictions would affect the Russian subsidiaries of foreign banks that had not yet been sold, leading with Austria’s Raiffeisen and Italy’s Unicredit Bank.
Refusal by banks and energy companies to work will result in heavy fines for companies, according to the decree.
Expensive electricity causes factory closures in Europe. The increase in the price of electricity in the EU is forcing owners of the most energy-intensive industries to close their facilities. Nyrstar has announced that it will shut down its Budel zinc plant in the Netherlands early next month. In addition, the large Slovalco aluminium plant in Slovakia will cease operations. The company's owner, Norsk Hydro, said that Slovalco would be operating at a loss at current electricity prices. Slovalco's total capacity is 175,000 tons of aluminium annually, but in recent months the plant has been operating at only 60% of capacity. Until the end of September, the plant’s main production lines will be mothballed entirely, and it will only resume work when market conditions allow.
137 RUSSIA Country Report September 2022 www.intellinews.com