By Ruzanna Stepanian
Armenia’s national electricity company sought on Wednesday to squash continuing speculation about its imminent takeover by a Russian energy giant whose top executives paid another low-key visit to Yerevan.
Officials at the Armenian Energy Ministry said Andrey Rapoport, deputy chief executive of the RAO Unified Energy Systems (UES), and other company officials arrived in Yerevan to take part in the annual meeting of the governing board of the Metsamor nuclear power station.
UES manages Metsamor’s finances in addition to its ownership of Armenia’s largest thermal power plant and several hydro-electric plants. The state-run power utility has reportedly shown interest in the Armenian Electricity Network (AEN) that handles power distribution across the country. Russian press reports have suggested that it is ready to pay $80 million for the network that was privatized in 2002.
AEN has previously denied such reports and reiterated the denial on Wednesday. “The distribution network was not and will not be for sale,” its spokeswoman, Margarit Grigorian, told RFE/RL. She said none of the company’s managers is scheduled to meet Rapoport.
AEN’s sale requires the Armenian government’s consent. Energy Ministry officials said they have received no takeover requests from the utility or potential buyers.
The Armenian government sold AEN to Midland Resources Holding, a British-registered firm, for $40 million in the hope of ending its huge losses that were estimated to cost the state budget $50 million each year. Individuals familiar with the sector say the company made some $20 million in pre-tax profits last year as a result of tackling widespread fraud among its employees.
Before establishing its presence in Armenia Midland Resources had virtually no experience in electricity distribution, specializing in exports of steel from Ukraine where it controlled a major metallurgical factory. The company is part of a multinational business conglomerate mostly owned by Alex Shnaider, a Russian-born Canadian businessman. Shnaider’s business interests are extensive and highly diverse, ranging from construction to real estate. Some of his assets are located in Russia.
The 36-year-old tycoon raised his international profile earlier this year with the purchase of one of the teams competing in Formula One racing, the world’s most expensive sport. Media reports estimated the deal at $50 million.