OREANDA-NEWS. According to Alfa Bank with reference to the Kremlin’s press service, on October 3 President Vladimir Putin approved an amendment to Russian Federal Law No. 36 of March 26, 2003 “On the specific features of the functioning of the electric power industry during the transition period.”

This essentially means that the amendment has now gone into force. It stipulates that those UES shareholders who completely ignore the EGM dedicated to UES’s breakup, scheduled for October 26, will be considered as having “voted in favor” of the breakup. Under current legislation, these shareholders would be treated as having “voted against.”

Alfa Bank's experts consider this approval as a positive news for UES’s minority shareholders. We therefore recommend that UES’s shareholders ignore thevote completely, as this is now the best option for them. On the one hand, it will allow them to retain their exposure to the mandatory buyout with a price of R32.15 per common share, which now looks attractive because it assumes a 7.2% premium over the UES’s current share price. On the other hand, by ignoring the vote, shareholders will avoid receiving illiquid shares in the so-called special holdings (Centerenergoholding, Intergeneratsiya and Sibenergoholding, which own assets attributable to Gazprom, Norilsk Nickel and SUEK, respectively) in their basket upon the company’s breakup.