Enel Russia - Reftinskaya Finally Being Sold, Will a Special Dividend Ensue?
Enel Russia's BoD has called an EGM to approve the sale of the Reftinskaya TPP to a subsidiary of Siberian Generating Company. The sale price is R21 bln, subject to an adjustment of up to 5% in either direction, as we understand, and an additional conditional payment of up to R3 bln to be rendered within five years from completion. The protracted saga of trying to sell Reftinskaya is ending, and we believe that the proposed price - especially given the potential increase - could be taken positively by the market. The big question then becomes what the company will do with the proceeds. We believe that it would have ability to share part of them with shareholders through a special dividend. We keep our BUY recommendation and, following an update to our model, we slightly adjust our target price to R1.47 per share.PJSC Enel Russia is a wholesale generation company in Russia. Co.'s main areas of operation are production of power and heat, supply (sale) of power and heat, receipt (purchase) of power and heat from the wholesale power (capacity) market. Co. is active in four production branches around Russia: in the Ural region - Reftinskaya GRES, Sredneuralskaya GRES, in the northern Caucasus - Nevinnomysskaya GRES, and in Central Russia - Konakovskaya GRES. Co.'s aggregate installed capacity is 9,677 MW for power and 2,382 GCal/h for heat. Co. provides power and heat to both industrial enterprises and household consumers via local power distribution networks.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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