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Enel sells its entire 56.43% stake in Russia to Lukoil and Gazprombank

19 June 2022

Enel informs that the agreements related to the sale of its entire stake in the share capital of Enel Russia have been signed today. Specifically, Enel has signed two separate agreements with, respectively, Lukoil and Closed Combined Mutual Investment Fund “Gazprombank-Frezia” for the sale of the entire stake held in Enel Russia, equal to 56.43% of the latter’s share capital, for an overall consideration of about 137 million euros that will be paid at closing.

Following completion of the transaction, Enel will dispose of all its Russian power generation assets, which include approximately 5.6 GW of conventional capacity and around 300 MW of wind capacity at different stages of development, ensuring continuity for its employees and clients. The transaction is in line with the strategic aim of the Group to focus its activities mainly in countries where an integrated position along the value chain can drive growth and enhance value creation from the opportunities offered by the energy transition. 

It should be noted that Enel has in any case already adopted or promoted some measures which have resulted in the termination of management and coordination with regards to Enel Russia. These measures include: (i) the designation by Enel of independent directors only, of Russian nationality, on the occasion of the recent renewal of the company’s board of directors; (ii) the appointment of a new general manager, also of Russian nationality, who reports exclusively to the board of directors; (iii) the termination, where possible, of intra-group contracts; (iv) the modification of the organizational structure of the Enel Group in order to interrupt the hierarchical reporting of the staff or business functions of Enel Russia to those of Enel.

The overall transaction, including the effect of the loss of control of Enel Russia, is expected to generate a positive effect on the Group’s consolidated net debt of about 550 million euros and will generate a negative impact on reported Group net income for approximately 1.3 billion euros, mainly driven by the release of a currency translation reserve worth around 1.1 billion euros as of May 31st, 2022. Such accounting effect will not have any impact on ordinary economic results.

The closing of the transaction, which is expected within the third quarter of this year, is subject to a series of conditions precedent, including the clearance by the Russian Government Commission on Monitoring Foreign Investment and the Russian Federal Antimonopoly Service.

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