MOSCOW, December 21 (RIA Novosti) - Mosenergo [RTS: MSNG] has approved an additional share issue in favor of strategic investor Gazprom [RTS: GAZP], the Moscow-based electric and thermal power utility said Thursday.
The vote follows a decision made by electricity monopoly Unified Energy System in October to transfer $2.1 billion of Mosenergo's stock to the Russian energy giant.
"On Wednesday, December 20, an extraordinary meeting of Mosenergo shareholders approved the enlargement of the company's charter capital by issuing additional shares in favor of its strategic investor," Mosenergo said in a statement.
Gazprom currently owns 25% of shares in Mosenergo.
Mosenergo earlier said it intends to use the proceeds from the additional stock issue, expected in March 2007, to repay loans extended by state-controlled retail savings bank Sberbank and government-run foreign trade bank Vneshtorgbank, and to develop Moscow's energy network.
UES, which currently holds a 50.87% stake in Mosenergo, will retain a controlling stake of 25% plus one share after the additional share issue.
Mosenergo is Russia's largest territorial generating company, supplying 80% of Moscow's heating requirements and 85% of power demand in the capital and the Moscow Region. The company has 17 power plants in the region, with electric power capacity of 10,600 MWt and heat capacity of 34,200 Gkal/hour.