In a statement, UES said it would sell 23.3 billion shares in one lot. The stake will be sold after the placement of a new share issue by OGK-4 in early August.
OGK-4, being spun off from UES as part of broad power sector reform, is currently issuing 23 billion new shares. The increase in equity aims to raise up to 46.52 billion rubles ($1.82 billion) that OGK-4 will channel into investments.
The firm's existing shareholders can exercise preemptive rights to buy the new shares before July 23. OGK-4's board will decide who to award with the issue within two weeks after the deadline expires.
The sale of OGK-4 shares is part of a partial privatization of the country's power industry, aimed at introducing competition and attracting investment into ageing infrastructure.
The reform envisages breaking up the state-controlled industry into separate private and semi-private generation and distribution firms and a state-controlled grid.
Germany's E.On, Finnish Fortum and RusAl have already shown interest in OGK-4's share issue, according to E.On officials and market sources.
UES said Troika Dialog investment company would accept bids for the state-owned stake until July 23.
OGK-4 has a total installed capacity of 8.6 gigawatts, and plans to add 2.4 gigawatts of generation capacity by 2011.
It has five plants in the Moscow, Perm, Smolensk, Tyumen and Krasnoyarsk regions, including Europe's largest power plant in Surgut with installed capacity of 4.8 gigawatts.
On Wednesday, OGK-4 reported net profit of 5.3 billion rubles ($207.6 million) for 2006.
OGK-4 said its earnings increased from 0.2 billion rubles in 2005 due to the reversal of impairment of property, plant and equipment.
Andrey Kitashev, the firm's general director, said that apart from noncash items, the results were helped by growing demand for electricity.
"This was possible, among other things, due to increased operating efficiency at the company's power plants, located in the regions with growing demand for electricity, as well as successful activity on the wholesale energy market," he said.
But Renaissance Capital noted in a daily market report Wednesday that the firm's lackluster performance was disguised by nonrecurring items.
"At first glance, OGK-4's accounts show the company made an attractive 20 percent net margin, with net profit of $202 million on revenues of $990 million," Renaissance CapitalDerek Weaving said in the report. analyst
"However, the income statement was flattered by a whopping $272 million income statement gain representing a reversal of impairment of fixed assets."
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