March 26, 2012 – The Board of Directors of OJSC “Bashkirenergo” approves the main principles of the Company reorganization .

The Board of Directors in order to avoid the negative consequences of failing to meet the Russian anti-trust legislation has adopted a decision to reorganize OJSC “Bashkirenergo”, which now controls both generating and distribution power capacities.

The proposed reorganization of OJSC “Bashkirenergo” is to be conducted in the form of a spin-off resulting in the establishment of two companies: generating company called Open Joint-Stock Company “Bashenergoactiv” (JSC Bashenergoactiv), and power grid company called Joint Stock Company «Bashkirian Power Grid Company» (JSC “BPGC”). Simultaneously with the spin-off JSC Bashenergoactiv is to be merged with Open Joint Stock Company “INTER RAO UES” (JSC “INTER RAO UES”).

The OJSC “Bashkirenergo” assets and liabilities are to be divided between the newly created entities in accordance with the division balance sheet. It is reassured that all the creditors of JSC “Bashkirenergo” will be provided with all the insurance arrangements in accordance with the Russian legislation.

Resulting from the spin-off JSC “BPGC” will acquire controlling stakes in major grid companies of OJSC “Bashkirenergo” such as LLC “Bashkirian Grid Company” and LLC “Bashkirian Distribution Grid”. JSC “Bashenergoaktiv” will obtain the shares of LLC “Bashkir Generation Company”, LLC “Bashkir Heat Distribution Grid”, and LLC “CCGT CHPP-5”.

Ordinary and preference shares of JSC “BPGC” and JSC “Bashenergoactiv” are to be distributed between the OJSC “Bashkirenergo” on different terms:

- JSC “INTER RAO UES” will not receive JSC “BPGC” shares, with its shares converted only into the JSC Bashenergoactiv shares.

- The JSFC Sistema Group shareholders are not getting any of the JSC “Bashenergoactiv” shares, with all their shares being converted into JSC “BPGC” shares.

- the rest of OJSC “Bashkirenergo" shareholders are to receive the amount of shares at JSC “BPGC” and JSC “Bashenergoactiv” equaling to the total amount of shares they owned at the time of the conversion.

The conversion ratios of OJSC “Bashkirenergo” shares into JSC “BPGC” and JSC “Bashenergoactiv” are to be determined by the OJSC “Bashkirenergo” general shareholders meeting decision. It is proposed to extraordinary general shareholders meeting of OJSC “Bashkirenergo” to adopt a decision of conversion of one ordinary and one type A preference share of OJSC “Bashkirenergo” owned by the minority shareholders into one ordinary share and one type A preference share of JSC “BPGC” and one ordinary and one type A preference share of JSC “Bashenergoactiv”.

Subsequently ordinary and type A preference shares of JSC “Bashenergoactiv” are to be converted into additional shares of JSC “INTER RAO UES” in accordance with merger agreement of JSC “Bashenergoactiv” to JSC “INTER RAO UES” and based on the decisions of general shareholders meetings of OJSC “Bashkirenergo” and JSC “INTER RAO UES”. The conversion ratio of one ordinary share of JSC “INTER RAO UES” (with face value of 0.02809767 RUR) per 0.0016588785046729 of an ordinary share of Bashenergoaktiv, and 0.00218293620292083 of a preferred share of Bashenergoaktiv.

Additional ordinary shares of JSC “INTER RAO UES” are to give to their shareholders equal rights as the already placed ordinary shares of JSC “INTER RAO UES” in accordance with the JSC “INTER RAO UES” Charter and the Russian legislation.

OJSC “Bashkirenergo” shareholders voting against the decision of reorganization in the form of the spin-off and/or reorganization of JSC “Bashenergoactiv” in the form of merger to JSC “INTER RAO UES” or not taking part in the vote are entitled to claim the buyout of their OJSC “Bashkirenergo” shares. The buyout price of OJSC “Bashkirenergo” shares was determined based upon the conclusion of the independent appraiser LLC “Independent appraisal institute” and amounted to 33.42 RUR for one ordinary share, and 25.39 RUR for one type A preference share.

The OJSC “Bashkirenergo” Board of Directors also determined June, 20, 2012 as the date of the extraordinary general shareholders meeting in the form of joint presence and with the “Khimikov” culture palace in Ufa (Pervomaiskaya ul. 47) as the place of the meeting. The Board of Directors has also decided to determine April 3, 2012 as the date of the record date for the list of the shareholders entitled to participate in the General Shareholders Meeting.

Upon the adoption of the decision on the reorganization JSC “Bashkirenergo” shares will be traded in the normal regime until the trading is suspended in accordance with the procedure determined by the FCSM of Russia and the rules of MICEX-RTS exchange, resulting from the termination of the OJSC “Bashkirenergo” activity registered by the state bodies and the conversion of the shares.