OREANDA-NEWS. On August 13, 2010 VST AB has received a letter from Visagino Atomine Elektrine UAB to the effect that on August 12, 2010 during the meeting of the Management Board a resolution was adopted regarding the definition of the main guidelines for reorganization of the electricity sector.  This resolution of the Management Board was also approved by shareholders of Visagino Atomine Elektrine UAB. In the transcript of minutes of the meeting of the Management Board, dated August 12, 2010 the following essential defined guidelines of the reorganization are presented:

1. The Reorganization is performed in order to ensure that the model of the Lithuanian energy sector activity complies with the National energy strategy, requirements of the Third Energy Package of the EU, aimed at liberalization of electricity and gas markets and creates conditions for integration of the Lithuanian electric energy system into the European Union market and ensures financing of the commenced strategic energy projects;

2. The Reorganization aims to ensure effective separation of electricity transmission activity from generation, supply and distribution activities and their commercial interests – to reorganize vertically integrated energy companies performing their activities in the sector;

3. During the Reorganization there will be formed four main blocks of companies for the activities of transmission, generation, distribution and maintenance:

3.1. Main goals of formation of the transmission block: (i) To separate and purify its activity, (ii) To comply with requirements of the Third Energy Package of the EU, (iii) to form a strong company, capable of interconnecting the Lithuanian electricity grid with ENTSO-E / ECN grid, beginning with the links to Poland, Sweden, (iv) to implement measures, meant to facilitate the liberalization of the electricity market, (v) to transfer auxiliary functions to maintenance companies.

3.2. Goals of formation of the generation block: (i) To purify and concentrate the activity of generation in one company – the joint-stock company Lietuvos Energija (these aims, inter alia, are achieved by transferring the joint-stock company Lietuvos Elektrinл to the joint-stock company Lietuvos Energija), (ii) To reorganize and centralize generation capacities, necessary to ensure the energy independence of Lithuania, (iii) to transfer auxiliary functions to maintenance companies.

3.3. Main goals of formation of the distribution block: (i) To form a customer-oriented and effectively functioning company while revising the branches of the core activity (ii) to obtain all possible synergies while merging the joint-stock company VST and joint-stock company Rytш Skirstomieji Tinklai, (iii) To prepare the distribution networks company, which is currently under merging, for possible attracting of funds, (iv) to transfer auxiliary functions to maintenance companies.

3.4. Main goals of formation of the maintenance block: (i) To purify and optimize activities of maintenance, by establishing two companies of network maintenance, by implementing promotion measures of free market and, when necessary, by allowing entrance of a strategic investor (if it is economically feasible), (ii) the Generation maintenance company: to concentrate capacities and maintain competitive advantage, (iii) the Assets management company: to accumulate, optimize non-technological real estate and transport under ownership, to sell redundant assets at most favorable conditions, (iv) Commercial IT company: to perform the sales of data transmission and data center services at the market.