Energeticky a Prumyslovy Holding (EPH) has closed the first phase of buying into Slovenske elektrarne, the Czech-Slovak group announced on July 28.
The deal hands EPH a 33% stake in Slovakia's dominant power producer via subsidiary, EP Slovakia BV (EP Slovakia). The closely-held group received the green light from the EU on competition grounds on July 26.
The sale of the company by Italian utility Enel provoked fury from Bratislava, which holds 34% in SE and made it plain it would seek control. That put off several potential suitors, however EPH has a close working relationship with coalition leader Smer, sharing ownership of Slovakia's gas network via Eustream.
EPH agreed an initial price of €375mn for a 50% stake in Slovak Power Holding BV (SPH), which holds a 66% stake in SE. The Czech-Slovak group has an option to buy a further 33% once the over-budget and long-delayed expansion of the Mochovce nuclear plant is operational. However, the Slovak government has pre-emptive rights to step in, which would hand it a controlling stake of 67%.
However, with the costs on Mochovce almost continually spiraling over recent years, EPH says the price could change.
"The basic price for the 50% stake in SPH in this transaction was set at €375mn, provided that €150mn are paid within this first phase of the transaction," EPH explains in a statement. "However, the basic price could vary depending on a set of parameters in the contract; these parameters mainly concern the costs of the completion of units 3 and 4 of the Mochovce nuclear power plant … the operating parameters of the new units, and power prices in Slovakia. An adjustment mechanism will be applied for calculating the balance of the price. Independent experts will calculate the price using the agreed formulae."
The purchase is part of a vociferous drive by EPH over recent years to boost its holdings of coal-fired power around Europe. The deal will hand the group its first interest in a nuclear facility. Meanwhile, it has been buying assets in Western Europe, betting on the establishment of 'capacity markets' to tide markets over whilst they transition to renewable energy. That has raised persistent questions about the company's financial stability, and the dangers to taxpayers in various countries.
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