Gazprom and Renova may consolidate power assets

According to Kommersant, Gazprom and Renova announced plans on 18 January 2012 to pool their power assets. An initial attempt at consolidation had been rebuffed by the Federal Antimonopoly Service owing to monopoly concerns.

According to the new attempt, Gazprom would receive 75 per cent of the new company and Renova 25 per cent. A new petition will be submitted soon to the Federal Antimonopoly Service.

No details have been provided about the assets to be included in the company and the assets to be spun off for the deal to gain the regulator’s approval.

At the same time, the transaction could be scuppered by the failure of the parties to reach agreement on the transaction structure and its terms. After the last due diligence of the assets owned by Renova’s vehicle in the power sector (IES Holding), Gazprom had allegedly disputed the quality of these assets, in particular an aggregate debt burden of USD 4 billion.

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