By June 30, 2008, Unified Energy will be dissolved after spinning off subsidiaries and floating a portion of shares in those companies on the Russian stock market and finally selling the remaining at auctions.
In spite of dismal market conditions, the company has raised more than $33.9 billion. According to Russian officials, in order to attract investors and buyers, electricity tariffs will be liberalized for industrial consumers by January 2008.
Unified Energy primarily sells to other utilities rather than portfolio investors. However, portfolio investors and hedge funds are buying shares in the newly privatized Russian electricity companies.
In relation to the privatization of Unified Energy, James Fenkner, chairman of Red Star Management, a hedge fund based in Russia, said: From a market point of view, it’s very sexy. You are going, all of a sudden, from a system of government-controlled inputs and outputs to a market-based system with more potential for profit.
