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Selection of legal schemes for conduct by the shareholder in a generating company when concluding an agreement on provision of capacity on the wholesale market.
ZAO Promregionholding
CJSC Promregionholding is an investment company owning a number of major assets in the electric power industry. Over the last 4 years of its business, the company has actively participated in investment projects connected with the reform of the electric power industry in the Russian Federation. Promregionholding is currently a major owner of a block of shares in OJSC MRSK Yuga.
The Project:
Selection of legal schemes for conduct by the shareholder in a generating company when concluding an agreement on provision of capacity on the wholesale market.
Project term:
September – October 2007
Project description:
Specialists of the Vegas Lex Commercial Practice developed various legal schemes for conduct allowing the shareholder in a generating company to minimise the risks involved in concluding an agreement on provision of capacity on the wholesale market, which is mandatory for signing at the stage of acquisition of shares in a generating company (in particular, the risks of incurring substantial costs and of not being able to influence amendment of the agreement). The ultimate strategy developed by our specialists achieved the following business goals: 1) mitigation of the risk of liability of the generating company/shareholder for failure to fulfil the terms and conditions of the concluded agreement on provision of capacity; 2) an opportunity to influence the terms and conditions for fulfilment of the agreement (parity of the parties to the agreement); 3) an opportunity to make independent decisions, beneficial to the shareholder, in relation to investment in construction of power capacity. In developing the strategy, account was taken both of the current legislative regulation of the electric power market and the plans for changes to it.
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