Yerevan/Mediamax/. President of Tashir group of companies Samvel Karapetyan presented some details of the purchase of Electric Networks of Armenia in an interview published today in RBC Daily.

We present an excerpt from the interview:

- It was announced in early autumn that you were purchasing the Electric Networks of Armenia from Inter RAO. Why do you need this asset? It has a lot of debt.

-Yes, the company had debts, but about USD 220 mln actives were purchased to cover these debts.

- Can you tell us if it was charity?

- No, of course it wasn’t charity. Electric Networks of Armenia is a good company and a long term active and it will become considerably better managed by us.

- How can an unprofitable company be good?

- We purchased the company at a very bad state, It was unprofitable, but will become profitable.

- Who came to you with a purchase offer?

- It was offered by Inter RAO.

- By who exactly? CEO Boris Kovalchuk?

- Naturally so. They couldn’t sell such an active without Mr. Kovalchuk. One of the members of the management board of Inter RAO approached us with the offer. The final decision was made after we got a request from the Armenian government.

- Both Prime Minister Hovik Abrahamyan and President of Armenia Serzh Sargsyan requested that after the protests against an increase in electricity tariff in Yerevan. Did they fear that the people will become out of control?

- Yes, on the one hand we want to bring the company to order, on the other hand, we understand that this is a strategic active for Armenia and it influences the investment climate in the country. I’m sure we can change it.

- Was the purchase costly?

- Yes, nobody gave the company to us as a present.

- How costly?

- We do not disclose the terms of the deal at this time.

- You mentioned that you purchased the company with a debt load of USD220 mln. Can you at least tell us how much of the debt you paid off?

- Around 20%.

- Have you seen the speculations in the Armenian press that you bought the company with a political intention- to make sure that your brother Karen Karapetyan becomes the Prime Minister of the country?

- They have been writing about it for 10 years now, but he hasn’t become the Prime Minister yet. He has no connection with  Inter RAO deal. We consider the purchase both as business and support of the motherland.

- What percentage of the company did you buy?

- We bought 100%.

- Inter RAO is showing 25% in the financial statement. 

- The structure of the purchase is such: the shares become ours in stages. Currently 50% of the shares belong to us.

- How are you planning on making money on electric networks? This market is strictly regulated.

- It's true. Energy is a very vulnerable business; a lot depends not only on regulators, but also on consumers. But, surprisingly, people pay for electricity regularly and responsibly in Armenia. Payment of electricity consumption by the population is 99.8% now.

- And yet, how will the margin appear?

-We aren’t thinking about margin yet. We will not be thinking about it for 5 years certainly. It is a long lasting active, its forever.