October 15, 2012 / 5:01 PM / in 5 years

Russia to create "umbrella" company to manager power grids

MOSCOW, Oct 15 (Reuters) - Russia’s Energy Minister said the state will create an “umbrella” company to manage power grid firm MRSK and Federal Grid Co (FSK) , in which it holds majority stakes, but ruled out a merger of the two companies.

Alexander Novak said a merger was a “false expectation” for the two companies, which were spun off from state-controlled power monopoly RAO-UES several years ago.

“We are talking about the creation of a managing company, which will manage both FSK and MRSK,” Novak said after a meeting at President Vladimir Putin’s residence of Novo-Ogaryovo.

In May, the head of Russia’s top crude producer Rosneft and the then acting Deputy Prime Minister Igor Sechin had proposed to merge the companies, an idea that some analysts slammed at the time as short-sighted.

The two companies were created in 2007-08 when RAO UES was broken up into three main divisions: wholesale and regional generators, distribution grids and the Federal Grid or FSK.

The financial crisis of 2008 held back further privatisations and the state still controls 70 percent of the sector.

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