MOSCOW (Reuters) - Russian state holding company Rosneftegaz may buy a blocking stake in hydroelectric giant Rushydro (HYDR.MM), a source close to the deal said on Thursday, a sign that the company will take part in the state’s privatization plans.
President Vladimir Putin said in May that Rosneftegaz - which holds stakes in Gazprom (GAZP.MM) and oil major Rosneft (ROSN.MM) - could take part in auctions of state energy and power companies to prevent them being sold to the private sector on the cheap.
His comments left investors scratching their heads about the nature of Putin’s strategy on privatization, which was originally intended to attract foreign investment and expertise as well as line state coffers.
According to the source, Rosneftgaz will offer to pay 85 billion roubles ($2.63 billion) for a blocking stake in Rushydro, one of a long list of firms the government has sought to privatize.
Rushydro will also take part in an exchange of assets with state power holding company InterRAO (IRAO.MM), part of a plan to consolidate the state electricity sector, the source said.
Government officials declined to comment. Rushydro could not immediately be reached for comment.
The company is desperate for investment to upgrade aging infrastructure in a bid to prevent power outages and boost efficiency. ($1 = 32.3595 Russian roubles)
Writing By John Bowker; Editing by Jon Loades-Carter