Oil Report

Russia's Inter RAO plans to sell its business in Armenia

YEREVAN/MOSCOW, Sept 17 (Reuters) - Russian energy company Inter RAO may sell its power distribution subsidiary in Armenia, a company whose request for an electricity price rise triggered mass protests in the former Soviet country.

The Armenian government said on Thursday it had accepted a request from Inter RAO to sell its Electric Networks of Armenia (ENA) to Cyprus-registered Liormand Holdings Limited.

“The company got a proposal about a sale which is under consideration right now. It applied to the Armenian government about a possible sale. The decision to sell has not been made yet,” a source in Moscow familiar with the situation told Reuters.

Inter RAO declined to comment.

In June, the state regulatory commission decided that household electricity prices should rise after ENA asked for a price increase, citing a fall in the dram currency.

The price increase took effect on Aug. 1, triggering a wave of street protests in the Armenian capital Yerevan.

The government said it would cover part of the the price rise, but this did not satisfy protesters and more protests broke out on Saturday.

Police briefly detained about 50 people who had blocked a main highway, a day after thousands of people demonstrated in the city centre.

Armenia, a former Soviet republic of 3.2 million people, has been badly hit by the economic downturn in Russia which has hit exports and much-needed remittances from Armenian workers there. (Reporting by Hasmik Mkrtchyan in Yerevan and Anastasia Lyrchikova in Moscow; writing by Margarita Antidze; editing by David Clarke)