“T Plus” monopolizes the heat market in Yekaterinburg for 5 billion. City loses control over key energy asset
ETK shares will be auctioned off
The administration of Yekaterinburg is at risk of losing control over a crucial city asset. The Federal Property Management Agency is auctioning off the share of MUE Ekaterinburgenergo in ETK, which is owed by the city authorities and T Plus. The sale is intended to pay off the massive debts of the municipal enterprise to resource supply companies. T Plus is expected to bid for the purchase of the ETC share. This could lead to the city receiving billions of rubles, but it seems likely that the complete privatization of Yekaterinburg’s heating network assets was planned from the start. The city officials previously stated that the municipality would always own “at least a blocking stake.”
The Territorial Directorate of the Federal Property Management Agency in the Sverdlovsk Region has announced the sale of ordinary shares of JSC Ekaterinburg Heating Network Company (ETK) as part of the sale of seized assets. The owner of the securities is Ekaterinburgenergo Municipal Unitary Enterprise, which already had debt before the merger with ETK. 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”. 30% of the shares are owned by the company, while the remaining share is owned by PJSC T Plus.
One of the main creditors of MUP is the electricity supplier Ekaterinburgenergosbyt JSC, which is owned by OAO IDGC of Urals. The company’s press service stated that today the company’s debt is 301.7 million rubles, including 270.2 million in enforcement proceedings. The organization disputed the results of the assessment, stating that in 2021 the asset was valued at 13.3 million rubles.
Besides Yekaterinburgenergosbyt, the combined enforcement procedure involves the claims of Municipal Unitary Enterprise Vodokanal, JSC Uralsevergaz, and around a hundred smaller claimants. At the same time, overdue tax obligations are occasionally paid off, but new ones arise in the future.
The Yekaterinburg administration did not respond to questions about the risks in the publication, but mentioned that the debt of MUP Ekaterinburgenergo was partly due to non-payments by the population. The official representative of PJSC T Plus declined to comment on the situation.
The person familiar with the situation, who spoke to the publication, explained that T Plus will likely, with the agreement of the city administration, become the main contender to purchase a city asset. As a result, the process of privatizing the main energy asset of Yekaterinburg will be completed.
It's important to note that JSC “ETK” was created by merging the assets of PJSC “T Plus” and the property of MUP “Ekaterinburgenergo” in 2015. As a result, the parties received shares equivalent to the value of the contributed property. MUE Ekaterinburgenergo contributed property worth 4.2 billion rubles to the authorized capital of the newly formed structure, and the total amount of investments from the city during the creation of the ETK was 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, on its part, contributed its own heating network assets to the charter.
The transaction for the sale of shares, according to market participants, will be comparable to the volume of the administration’s investments. Additionally, some of the proceeds from the sale of securities will be used to repay the debt to another asset of the mayor’s office – Vodokanal. Currently, the amount of obligations to the supplier is 150 million rubles.
At the time of the company’s creation, Yekaterinburg officials stressed that the municipality’s share should always exceed the blocking stake (25% + 1 share) and in the future, it can only be increased by transferring ownerless networks to the balance sheet. Now, however, the city seems to be at risk of facing a very different scenario.
