ArmInfo. International Energy Corporation (IEC) CJSC, which operates the Sevan-Hrazdan cascade of hydroelectric power stations in Armenia, intends to pledge its shares and property in HSBC and / or in the Eurasian Development Bank. The opportunity to pledge shares and property of the company will be the subject of discussion at the RA Public Services Regulatory Commission (PSRC) on February 19.
According to the PSRC, it is planned that 90% of the ordinary shares of CJSC - 527085 at a nominal price of 1,000 drams for each, as well as the property of the company, will be secured. Earlier, PSRC appealed to the Prime Minister's office in order to clarify the position of the RA government. Due to the fact that there are no objections from the Ministry of Territorial Administration and Infrastructure, the Ministry of Economy, the National Security Service and the Security Council, the Public Services Regulatory Commission intends to satisfy the company's request. Moreover, the deal will not affect the security of the energy complex of Armenia, the interests of domestic consumers, and the country's national security. The term for concluding an agreement on a transaction shall not exceed six months from the date of entry into force of this decision by the PSRC. The company undertakes to submit copies of the necessary documents to the Commission within three weeks.
The PSRC report does not indicate the reasons for the collateral, however, according to information available to ArmInfo, the Tashir Group of Companies intends to attract credit resources from HSBC Armenia and the Eurasian Development Bank to repay IEC debts, which will enable the Group to fully acquire the rights of the owner of IEC.
Recall that on December 5, JSC Hydroinvest is a 100% subsidiary of RusHydro concluded an agreement with the Hrazdan Energy Company OJSC (RazTES), which is part of the Tashir group, on the sale of the package of CJSC International Energy Corporation. RusHydro owned 90% of the shares of IEC. Earlier, RusHydro announced that it had terminated its participation in IEC The conclusion of the contract of sale was approved by the board of directors of the company. The permit for the transaction was issued by the Public Services Regulatory Commission of the Republic of Armenia. In accordance with the agreements of the parties, the cost of 527,085 ordinary registered uncertified shares of IEC amounted to 172.96 million rubles. Under the terms of the agreement, the buyer will fully repay IEC's loan obligations to the European Bank for Reconstruction and Development and the Asian Development Bank, after which the shares of the owner of the Sevan-Hrazdan cascade of hydroelectric power stations will be transferred to the buyer's property, and guarantees for these loans and consolidated debts will be withdrawn from RusHydro group will decrease by $ 55 million.
The proposal from RazTES was received in July 2019. E&Y valued 90% of IEC at 140 million rubles, but the asset was sold at a book value of 172.97 million rubles. RusHydro bought the hydroelectric power station from Inter RAO in 2011 for 172.9 million rubles, the same one received them when the RAO UES of Russia was split. RusHydro announced its intention to sell the asset as a non-core asset back in 2017 due to the large debt burden, which cannot be reduced due to low tariffs. If the IEC violates covenants or debt payment schedules, this could lead to a cross-default on RusHydro's obligations - to avoid this, the company would have to inject additional funds into the IEC. "IEC" CJSC is one of the largest electricity producers in the territory of Armenia. The installed capacity of the company's hydropower plants is 561.4 MW, or about 14% of the total installed capacity of power plants in the Republic. The company owns a seven hydroelectric power plants that generate 8-10% of the country's electricity. The hydropower cascade uses the natural runoff of the Hrazdan River and irrigation water releases from Lake Sevan.
