Bloomberg News

Federal Grid, RusHydro Decline on Rosneftegaz New Share Report

May 30, 2012

Federal Grid Co. and OAO RusHydro tumbled after Vedomosti reported state-owned Rosneftegaz may spend as much as 130 billion rubles ($4 billion) buying new shares of state energy companies.

RusHydro lost 3.2 percent to 78.89 kopeks by the close in Moscow. Federal Grid fell 5.7 percent to 18.07 kopeks, the weakest since April 2009.

Minority shareholders’ stakes may be diluted if new shares are issued, according to Alfa Bank analyst Alexander Kornilov and ING Groep NV’s Igor Goncharov.

“This is negative news for investors,” Kornilov said by phone. “This adds dilution risk for minority shareholders.”

-- Editors: Alex Nicholson, Peter Branton

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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