The Kazakh Ministry of Finance has announced that there will be no dividend payments to preferred shareholders of the joint stock companies Ust-Kamenogorsk Hydroelectric Power Plant and Shulbinsk Hydroelectric Power Plant.
The ministry said in a statement that on July 23, 1997, U.S. power company AES signed a treaty regarding the purchase and sale of 100 percent of the voting shares of four Kazakh energy companies and the provision of the assets of Ust-Kamenogorsk and Shulbinsk.
In October 1997, they entered a concession agreement for the transfer of assets, according to which the two companies transferred the property without encumbrances for a period of 20 years. The obligation to pay dividends on preferred shares of stock remained with Ust-Kamenogorsk and Shulbinsk.
Because the joint stock companies do not carry out production activities and do not turn a profit, the payments are not available.
The Committee on State Property and Privatization of the Ministry of Finance along with the relevant government agencies, sent a new draft agreement to AES that addressed the issue of repayment of dividends to preferred shareholders.
Adoption of the new agreement was interrupted in mid-2010 when AES filed a lawsuit against the Republic of Kazakh with the International Centre for Settlement of Investment Disputes in connection with what it said were illegal activities.
The case is still in the court and a decision is expected by the end of the year when the issue of dividend payments to preferred shareholders will be addressed.
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