Russian utility Mosenergo became the first Russian-registered company to sell securities in the United States on Wednesday when it issued $22.5 million worth of American Depositary Receipts -- U.S. securities look-alikes backed by Russian stock.


The firm sold 2.5 million ADRs amounting to nearly 3 percent of its stock at a cost of $9 an ADR. Each ADR is the equivalent of 30 shares, making share prices the equivalent of 30 cents each.


James Dennis, director of investment banking for Salomon Brothers in the CIS and Russia, said demand for the securities was placed at $50 million, Reuters reported.


The U.S. investment house, acting as financial consultant, presented the ADRs last week, with placement set to conclude Wednesday. The Bank of New York acted as repository for the deal.


Of the various types of ADRs, Mosenergo's "private placement" is among the most basic, and is open only to qualified institutional buyers, according to experts. It is not subject to approval from the U.S. Securities and Exchange Commission.


However, Miljenko Horvat, president of Citibank-Russia, said that because Mosenergo's ADRs cannot be traded over the counter, they fail to achieve one of the main objectives of using the paper.


"The main reason for issuing an ADR is to get your name on the market. To get your stock traded on the open market," said Horvat, whose firm is competing with the Bank of New York for dominance in Russia's ADR market. "This is something slightly different."


Other types of ADRs which can be sold over the counter or through stock exchanges require increasingly strict compliance with SEC regulations.


In September, the SEC gave a thumbs-up to over-the-counter sales, but requires that each firm seeking to issue such ADRs obtain individual approval for the sales. No Russian firm has issued such an ADR.


"This isn't the ADR that everyone's been talking about as far as getting the green light" from the SEC, said Diana Downing, an attorney with Milbank, Tweed, Hadley & McCloy. "There's been a bunch of private placements."


Companies that have conducted private placements internationally include St. Petersburg Long-Distance Telephone, Sun Brewing, Volga Paper and Russian Telecommunications Development Company, a subsidiary of U.S. West.


The latter three were handled by the investment bank CS First Boston in 1993 and 1994. However, Downing said that Mosenergo's placement marks the first time a Russian entity has itself broached the U.S. market. It is a move that one official from the Bank of New York called nothing less than "ground-breaking."


"This is the first ADR for a Russian company incorporated and registered in Russia," said Chris Sturdy, vice president at the bank and head of depositary receipts for Europe, Africa and the Middle East. "We're certainly pleased with the level of interest which has already been expressed to us by a large number of investors."