The general meeting of shareholders of AO MOSENERGO that was held on June 28, 2004, approved a decision to reorganize the Company. According to the federal law On Joint-Stock Companies, the shareholders who have voted against the reorganization or did not take part in the voting, have the right to sell their shares to the Company.

In accordance with the current legislation, buy-out applications should have been submitted to AO MOSENERGO no later than August 12, 2004. AO MOSENERGO has been asked to buy-out 19,118,878 shares (0,6% of the charter capital) worth the total of 35, 719,000 rubles (ADRs account for 92%).

The shares are bought out at the price that was approved by the board of directors of AO MOSENERGO based on the appraisal that was conducted by the independent appraiser Ernst&Young, at 1.84 rubles (see Protocol no. 34 of the BoD meeting as of April 27, 2004). AO MOSENERGO shares will purchased by ZAO Specialized Registrar Register-Service (as per AO MOSENERGO’s request) until September 13.

The shares that are being bought back will be cancelled, with the subsequent decrease of AO MOSENERGO’s charter capital.