Bin Sulayem unaware of group firm's Russia plan

Dubai: Sultan Ahmad Bin Sulayem, chairman of state-owned investment group Dubai World, said he is "not aware" of any plan by a company under his control to buy Russian utility OGK-1.

"It may be that one of our companies is talking to them, but it hasn't come to the investment board because I'd know," Bin Sulayem said in a phone interview yesterday.

Dubai World is in talks with OGK-1's parent company, Unified Energy System, via energy trader Roskommunenegro, to buy control of OGK-1 for $5 billion, Dow Jones Newswires reported yesterday, citing two unidentified people with knowledge of the matter.

Dow said the talks are being held via Roskommun-enegro, a Russian energy trader chaired by Igor Kozhin, the son of Vladimir Kozhin, who runs the Kremlin's property department.

A group of investors led by Russian billionaire Viktor Vekselberg abandoned plans to buy OGK-1 after failing to agree on a price with state-run Unified Energy, which will cease to exist this month. Electricite de France (EDF) and Finland's Fortum have also expressed interest in Moscow-based OGK-1, which is one of two power utilities Unified hasn't sold yet.

Adel Al Shirawi, vice-chairman of Istithmar World PJSC, a private equity investor that is a part of Dubai World, said on Tuesday when asked about the report that no such proposal has been sent to him for approval.

Price tag

Unified Energy, the power producer which is being broken up by Russia's government, wants at least $5 billion for 75 per cent of OGK-1, chief executive officer Anatoly Chubais said on May 15.

He said Unified Energy would sell only if the price was right. If there is no sale, the state's shares will go to the Federal Grid Co and RusHydro, which can sell them later. RusHydro is the world's second-biggest hydropower company by capacity.

Russia needs as much as 120 billion euros ($185 billion, Dh679 billion) to modernise and expand power plants and infrastructure through 2011, as ageing equipment and constrained capacity threaten to slow economic growth, Chubais said last month. Moscow-based Unified Energy, which has raised $32 billion selling generating units since last year, has three units left, including OGK-1.

Unified Energy spokes-woman Marita Nagoga said yesterday the state's stake in the company can be sold whenever an appropriate buyer appears. OGK's new share sale has to take place by February 2009 under an existing board decision, unless that is renewed, she said, declining further comment.