Italy’s A2A has initiated procedures to sell its stake in power firm EPCG and is expected to soon start official talks with Montenegro’s government, Prime Minister Dusko Markovic told the parliament on May 31.
A2A reportedly hired investment bank Rothschild in May to help the company exit EPCG. The move was expected as the Italian company has an option to sell its 41.7% stake to the Montenegrin government for €250 between June and September this year, according to the contract with Montenegro’s government, which holds the controlling 57% stake in EPCG, on the management of the power firm.
“We shall wait for their decision. This decision should be tabled to us so that we decide whether to accept it or we shall use our right of redemption of shares,” Markovic said during prime minister’s hour at parliament, broadcast by the government’s website.
He added that although the government has not officially started negotiations it is in contact with A2A’s representatives.
The latest extension of the management contract was signed at the beginning of March and expires at the end of September. Under this annex, the Italian company should take a final decision whether it will sell its stake in EPCG or remain a shareholder.
At the beginning of March, local media reported that the government was trying to reduce A2A's put option that would allow the company to sell its stake in EPCG for €250mn. Although Podgorica was unable to achieve this, it succeeded in including an option to renegotiate this sum in the latest annex.
A2A acquired a stake in EPCG in 2009. Since then, the Italian company has managed EPCG under an agreement with the state.
The Italian company was expected to exit EPCG mainly due to its lack of enthusiasm for the project to extend the capacity of TE Pljevlja, which now has only one unit of 210MW. The new unit must have a capacity of 220-300MW and a net electricity efficiency of no less than 38%. The project also envisages providing heating for the town of Pljevlja in cooperation with the local administration.
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