“T Plus” monopolizes the heat market in Yekaterinburg for 5 billion. City loses control over key energy asset

ETK shares are going to be sold at auction

The administration of Yekaterinburg risks losing control over a key asset of the city’s life support – at the request of the Sverdlovsk department of the Federal Bailiff Service, the Federal Property Management Agency put up for auction the share of MUE Ekaterinburgenergo in ETK (the beneficiaries are the city authorities and T Plus). Due to the sale of the asset, it is planned to pay off billions of debts that the municipal enterprise has accumulated to resource supply companies. Among the main creditors of Ekaterinburgenergo are suppliers of electricity, water, as well as the Federal Tax Service and more than a hundred small counterparties. Sources of the publication on the market believe that the main shareholder, T Plus, will apply for the purchase of a stake in the ETC. According to experts, firstly, the energy company is not interested in the emergence of a new partner, and secondly, it will receive obvious advantages in the event of a complete consolidation of the asset. In addition, T Plus has sufficient financial resources to close the relevant transaction. Insiders add that as a result of the consolidation, the city can receive billions of rubles, and the scheme for the complete privatization of Yekaterinburg’s heating network assets, most likely, was determined at the stage of creating the UTC. However, then officials preferred to assure that the municipality would always own “at least a blocking stake.”

The Territorial Directorate of the Federal Property Management Agency in the Sverdlovsk Region, as part of the sale of seized assets, announced the sale of ordinary shares of JSC Ekaterinburg Heating Network Company (ETK) in the amount of more than 921 million shares of the main issue and 4 billion shares of the additional issue. The owner of the securities is Ekaterinburgenergo Municipal Unitary Enterprise, which accumulated debt even before the merger with ETK. At present, the total obligations of the enterprise in the consolidated enforcement proceedings amount to about 1.2 billion rubles.

To clarify, JSC “ETK” is controlled by the administration of Yekaterinburg through the MUE “Ekaterinburgenergo”. The company owns 30% of the shares. The remaining share is owned by PJSC T Plus.

One of the main creditors of MUP is the electricity supplier Ekaterinburgenergosbyt JSC (owned by OAO IDGC of Urals). According to the company’s press service, today the company’s debt is 301.7 million rubles, including 270.2 million are in enforcement proceedings. The organization recalled that in 2021 the asset was valued at 13.3 million rubles, but the lawyers of Yekaterinburgenergosbyt disputed the results of the assessment.

In addition to Yekaterinburgenergosbyt, the consolidated enforcement proceeding includes the claims of Municipal Unitary Enterprise Vodokanal, JSC Uralsevergaz, as well as about a hundred small claimants. At the same time, overdue obligations to the tax are periodically extinguished, but new ones appear in the future.

The administration of Yekaterinburg left the questions of the publication regarding the risks unanswered, however, they noted that the debt of MUP Ekaterinburgenergo was formed, among other things, due to non-payments of the population. The official representative of PJSC T Plus refused to comment on the situation at all.

The interlocutor of the publication, who is familiar with the situation, meanwhile explained that, most likely, T Plus, in agreement with the city administration, will become the main contender for the purchase of a city asset. Thus, the process of privatization of the main energy asset of Yekaterinburg will be completed.

Recall that JSC “ETK” was formed by combining the assets of PJSC “T Plus” and the property of MUP “Ekaterinburgenergo” in 2015. As a result, the parties received shares commensurate with the value of the contributed property. MUE Ekaterinburgenergo contributed 4.2 billion rubles worth of property to the authorized capital of the newly formed structure, and the total amount of investments from the city during the creation of the ETK amounted to 5.1 billion rubles. In physical terms, the city contributed 2.2 thousand km of networks, 355 central heating points and movable property to the UTC. T Plus, for its part, contributed its own heating network assets to the charter.

Thus, the cost of the transaction for the sale of shares, as market participants argue, will be comparable to the volume of administration’s investments. Moreover, part of the proceeds from the sale of securities will be used to repay the debt to another asset of the mayor’s office – Vodokanal. Today, the amount of obligations to the supplier is 150 million rubles.

It is noteworthy that at the time of the company’s creation, Yekaterinburg officials emphasized that the municipality’s share should always exceed the blocking stake (25% + 1 share) and in the future can only be increased by transferring ownerless networks to the balance sheet. Now, however, the city appears to be in danger of facing a very different scenario.