Shares of the electric grid holding company 'Rosseti' (FEES) dropped by 9.9% during trading on the Moscow Exchange on Wednesday, May 27, settling at ₽0.05694 per share. This is backed by data at 12:52 MSK.
By 14:25 MSK, the decline slowed to 8.2%, with the share price correcting to ₽0.05802 each.
A sell-off in shares is observed after the announcement that 'Rosseti' plans to conduct an additional issuance of up to 903 billion shares at a par value of ₽0.5 in favor of the Federal Property Management Agency, which will represent over 39% of the current authorized capital (2.3 trillion shares). The emission volume at par value could reach up to ₽451.5 billion.
Additionally, the board of directors of 'Rosseti' recommended not to pay dividends based on the results of 2025. The shareholders' meeting, where these issues will be considered, is scheduled for June 26, 2026.
In the investment bank 'Sinara', they gave a negative assessment to the news of the additional issuance, considering its size. Currently, the Federal Property Management Agency owns a 77% stake in the charter capital, which could increase to 84% as a result of the additional issuance, analysts calculated. The additional issuance in favor of the state is linked to the exchange of assets from regional network companies contributed to the capital of 'Rosseti'. The funds obtained may also be used to finance network investment projects.
At 'BKS World of Investments', they noted that the additional issuance carries the risk of significant dilution of current shareholders' stakes, which the market is reacting to today. The announced amount for the additional issuance is ₽450 billion, suggesting a placement at ₽0.5 per share, which significantly exceeds the current market price of 'Rosseti' shares, according to 'BKS World of Investments'. If the funds were directed towards reducing debt, one could say that such an issuance might have a positive effect on the company's valuation; however, experts believe that the funds will likely be entirely allocated to the investment program, meaning they would practically be 'lost' for shareholders.
The 'Rosseti' group is one of the largest electric grid holdings in the world, providing electricity supply to consumers in 82 regions of Russia. They manage 2.6 million km of power lines and electrical substations with a total capacity of 900,000 MVA. 80% of all electricity generated in the country is transmitted through the networks of the 'Rosseti' group. The group includes 39 subsidiaries and dependent companies, including 17 network companies. The controlling shareholder of the parent company, PJSC 'Rosseti', is the state represented by the Federal Agency for State Property Management (Rosimushchestvo).