Rusneftegaz can confirm that we have entered into private negotiations with an undisclosed Indian company to acquire a portfolio of coal-fired power stations in the country. These talks, which have an exclusivity period of six months, will begin immediately to find a mutual agreement on the sale of the assets. The discussions will be led on our side by our newly appointed Director for International Operations, Igor Migunov, with oversight maintained by our management board. Meetings are scheduled to be held in both Moscow and Mumbai on a regular basis over the next twenty-six weeks, in conjunction with virtual conferences on the internet when appropriate. In due course, Rusneftegaz will also be assembling a technical delegation to conduct a comprehensive inspection of the sites with both our staff and a pool of external experts, who will report their findings back to our executive leadership. Prior to this announcement, our Deputy Chief Executive Officer, Aleksandr Filyurin, remarked:
“We are delighted by the opportunity we have to work in India, a great country with enormous potential for growth in the energy sector. When we discovered that such a large block of power capacity was available, we all knew that we had to capitalize. We have being looking for a project like this for a long time, and fortunately the timing has worked out in our favor. As we did more research into the finer details of the proposals, we discovered that there is an abundance of plants that are available, be that old plants, retired plants, or just plants that have never been fully installed or fully utilized. We hope this can be the catalyst for the Rusneftegaz's growth in Asia. From our preliminary talks so far, we are increasingly confident that we can come to a suitable arrangement. It will be a long and challenging set of negotiations, mainly because we have never tried to purchase such a complex set of assets before. That said, the board and I have absolute faith in Igor to get this over the line. He has done some outstanding work in the time since his promotion, and he deserves an exceptional amount of credit for setting this up in such a short timeframe. I hope that I will be able to report back to you in six months time with some positive updates.”
Since our current board of directors elected to change our business strategy in 2015, it has been the ambition of our organization to not only develop our business further internationally, but also expand our power operations. There is collective belief among our leadership that this particular area of our business has significant potential for sustainable and long-term financial growth. This is partially as a result of the extensive efforts of our research and development engineers, who have worked on improving and enhancing contemporary electricity generation technologies and methods for the past decade. It is also due to the innate opportunities presented by the Indian electricity market, which is the third largest in the world, but is in urgent need of foreign investment. Whilst the country maintains a surplus of power generation capacity, it lacks the associated infrastructure to fuel and transmit from these plants. It should also be noted that the sites that are presently functioning across the nation are often older, aging stations that rely upon inefficient technologies. These are both financially costly to maintain and operate, but are also responsible for significant quantities of pollution. Our management remains optimistic that our proposals will be able to rectify these issues by providing the inward funds necessary to develop the sector, whilst accruing considerable profits from these new potential revenue sources. However, whilst Rusneftegaz remains willing to provide the funds necessary to complete both the purchase and overhaul of such facilities, this transaction may be subject to and conditional upon local regularity approval, which may interfere with these plans. Rusneftegaz will not be making any further statements on this matter until an appropriate time, primarily due to the restrictions and limitations imposed by the confidentiality agreements that have been signed by members of our organization as to what can be disclosed in public.