Enel reportedly set to agree Slovenske Elektrarne deal with EPH

By bne IntelliNews November 15, 2015

Enel is expected to strike an agreement with Czech-based energy holding Energeticky a Prumyslovy Holding (EPH) on the sale of half of its 66% stake in Slovak power producer Slovenske Elektrarne (SE) by the end of the month, unnamed sources claimed on November 15.

Enel started exclusive negotiations with EPH in August. Last month, unnamed sources claimed a “general” agreement had been reached and the two companies were working on the details.

“Almost everything has been agreed, there are just a few little details to decide,” a source told the Financial Times on November 15.  Another said the deal will be sealed in the “coming weeks”.

Slovak Economy Minister Vazil Hudak expressed his conviction that the deal between Enel and EPH will be done “before Christmas," stressing that the company is a strategic asset for the country. Slovakia, which owns 34% in SE, has made it clear it wants to strengthen its position in the company, and has hired KPMG and SPP to advise it on a potential acquisition of an additional stake.

Hudak last month raised the possibility that the country could look at other options to gain control in the company. However, Prime Minister Robert Fico later said Slovakia wants an option to buy an additional 17% in SE following the completion of the over-budget and long-delayed project to expand the Mochovce nuclear plant. The problems at the project have enraged Bratislava, and are claimed as the justification for the obstacles it has placed in front of the Italian utility's efforts to sell SE.

Fico claims Enel will now sell 33% of its stake at first, with the rest to be offloaded after it completes the two reactors it is building at Mochovce. Enel says “negotiations with EPH are ongoing” and it expects to finalise a deal “some time soon”.

EPH’s entrance into SE is likely to be welcomed by Bratislava. The owners of the energy holding – from Slovak financial group J&T – are reportedly on good terms with Prime Minister Robert Fico, and have proven they can work happily with the government. EPH bought EDF Suez and E.ON out of their 49% stake in Slovak gas utility and pipeline operator SPP in 2013. The state holds the majority 51% stake, but EPH maintains operational control.

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