Irkutskenergo shareholders appeal to Central Bank of Russia in tug-of-war against Deripaska’s company

July 29, Natalia Derbysheva
Minority shareholders of Irkutskenergo have brought a complaint against the majority shareholder, Oleg Deripaska’s EuroSibEnergo, to the Central Bank. According to the complainants, EuroSibEnergo should pay twice the current stock price for their holdings in Irkutskenergo.
Minority shareholders of Irkutskenergo have brought a complaint against EuroSibEnergo, a company controlled by Oleg Deripaska’s En+ Group, to the Central Bank of Russia, their representative said. According to him, this is a collective complaint from the owners of 0.8% of the company’s shares (the public float being 9.155% of the shares and 0.37% of the ADRs).
As stated in the complaint, the shareholders insist that EuroSibEnergo should make them a mandatory offer to buy back their shares at a price of at least RUB 36.46 per share. In their opinion, the mandatory offer obligation arose for Deripaska’s company after EuroSibEnergo’s subsidiary company Telmamskaya HPP acquired 40.3% of Irkutskenergo shares from Inter RAO for RUB 70 billion on June 6 and the total shareholding of EuroSibEnergo Group in Irkutskenergo reached 90.5%. At the moment of the transaction, Irkutskenergo’s market value was 21.5 rubles per share, which means that the price paid by Deripaska’s company exceeds the market price almost twice.
The minority shareholders want EuroSibEnergo to tender a price of RUB 36 per share, i.e. almost twice what the shares cost at the time the deal was announced. According to the Russian Law on Joint-stock Companies, the buy-back price for shares trading on the stock market cannot be below the weighted average price for the last six months preceding the offer date – which is 16.73 rubles in the Irkutskenergo case in the period from January 12 to July 12. That said, EuroSibEnergo’s offer price should be at least equal to the price of shares for the purpose of an OTC transaction, if any, for that period, the complaint points out. Proceeding from the amount of the transaction with Inter RAO, the price paid by EuroSibEnergo must have been 36 rubles per share. Ilnar Mirsiyapov, a member of the Inter RAO Management Board, referred to short-received dividends from Irkutskenergo as the reason for the difference from the market price.
EuroSibEnergo and Inter RAO negotiated the deal for several years. In the summer of 2015, EuroSibEnergo CEO Vyacheslav Solomin said that the company would make an offer to the minority shareholders when the transaction was closed. EuroSibEnergo representatives did not return RBC’s calls for comment on Friday.
BMS Law Firm lawyer Denis Frolov believes that the minority shareholders’ claims are well-grounded. He says that EuroSibEnergo was to send a mandatory offer notice to Irkutskenergo which could then duly inform the minority shareholders within 15 days – this period expired on July 27. However, the failure to make an offer will not backlash on EuroSibEnergo, Frolov added: the company can safely vote 75% of its current share package (ca. 67.5% of shares) at the meeting of Irkutskenergo shareholders. According to the Law on Joint-stock Companies, a qualified majority is required for restructuring the company or for amending the charter, for example.
Alexander Shevchuk, Executive Director of the Association of Institutional Investors, believes that EuroSibEnergo should repurchase the shares at a price of 36 rubles per share. According to the Law on Joint-stock Companies, the buy-back price for minority shareholders cannot be below the price which the offer-making party paid for previously purchased shares, he reminds. 
For details, see RBC:
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