EPH reportedly mandates banks for stake sale of CE assets

By bne IntelliNews November 13, 2015

Czech-based energy group Energeticky a Prumyslovy Holding (EPH) has mandated banks to manage the sale of a stake in the recently spun-off unit holding its Central European assets, unnamed sources claimed on November 12.

EPH plans to sell up to 30% in EP Infrastructure (EPIF), either via an IPO in Prague and London or to a private buyer, Reuters reports, citing sources close to the deal. The plan suggests EPH may be in search of cash to reduce debt or to power the several new deals it is working on. The company has been on a buying spree over the past few years, borrowing heavily to snap up assets to turn itself into a regional heavyweight.

JPMorgan and Citi are reportedly the banks mandated, but they refused to comment, as did EPH. Last month, the holding said it will reorganise its Central European infrastructure assets under a single holding company and could look to sell - or even list - the business. A public listing could prove tricky given that the oligarchs that control the closely-held company - mostly connected to Slovak financial group J&T - are unused to dealing with shareholder demands.

Under the plan, EPIF will hold controlling interests in a number of businesses operating in gas, heat and power. That includes gas transmission operator SPP, which operates the Slovak section of the main overland route carrying Russian gas exports to Europe.

Over the past year, EPH began a new drive to the west, making several acquisitions to expand outside its core market in Central Europe. It bought a coal-fired plant in the UK and wrapped up a deal to buy E.ON’s coal and gas assets in Italy. The strategy to buy up coal-based assets is at odds with most major Western energy groups.

EPH is also the preferred bidder to team up with the Slovak government to buy Enel out of Slovenske Elektrarne. The holding has also said it is looking to buy the German lignite assets of Sweden's Vattenfall.

The brown coal mines and power plants are estimated to be worth €2bn. In a departure from its normal practice, EPH has teamed up with the Czech Republic's richest man, Petr Kellner, to try put together a winning bid. The holding is also reported to be talking with potential partners regarding an attempt to buy Czech oil refiner and fuels group Unipetrol.

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