Tim Gosling in Prague -
Police raided offices across the country belonging to Slovakia's dominant power producer Slovenske Elektrarne on July 23, hunting for documents related to its privatisation. The action comes as Italy's Enel looks to sell the controlling stake it bought in 2004.
Documents from Slovenske Elektrarne's (SE) "privatization era," were seized, a spokeswoman from the Slovak economy ministry told Bloomberg. A spokeswoman for Enel said the Italian company does not know the reason for the raid and is fully co-operating with police and prosecutors.
According to local media, the raids are part of work by a new special unit, set up at the end of June, to investigate suspected "breaches of obligations in the management of assets and the misrepresentation of financial and commercial records". In addition to SE’s headquarters in Bratislava, locations in the cities of Prievidza and Trencin were also raided.
The Mochovce nuclear power plant was also a target. Enel has come under huge criticism from Bratislava over delays and budget hikes on expanding the facility. The Italian company pledged to add two new blocks as part of its purchase of 66% in SE, which saw it pip Czech power giant CEZ with a €840m bid.
After months of speculation, Enel announced on July 10 that it will seek to sell its Slovak assets - as well as several Romanian units - as part of a debt reduction drive. The Slovak state retains the remaining 34% in SE, and has the right to approve any buyer of the Enel stake.
Already keen, CEZ management was essentially ordered to bid for the stake by its new overlord, Finance Minister Andrej Babis, on July 16. Babis has also recently begun pushing heavily for CEZ to start a new tender for expanding the Czech nuclear plant at Temelin, after the process was scrapped in April.
Other potential suitors for the Italian company's controlling stake in SE include CEZ competitor - and sometime partner - EPH, and France's GDF Suez. However, speculation in local media is also rife that Russian state nuclear agency Rosatom is keen, despite the obvious geo-political barriers such a deal could meet. Rosatom is the ultimate supplier of technology and fuel for Mochovce, and also offered to buy into Temelin as part of its bid in the former Czech tender.
An €870m loan from Russia's Sberbank to SE in June sparked that talk. Analysts have noted it's around the volume of cash needed to finish the expansion of Mochovce, and also that such a sizable credit line is rare in Central Europe to be offered without syndication. It has also been suggested that the Russians must have been granted a deep look into SE's accounting and other paperwork to agree the deal.
The problems at Mochovce have done little to improve Prime Minister Robert Fico's dim view of privatization, but with state coffers empty, his hands are tied in renationalizing major assets. He has instead overseen deals that have seen Western giants sell to CEE based investors, often with ties to Bratislava.
E.ON and GDF Suez sold gas utility SPP last year to EPH, which is now controlled by Slovak financial group J&T, with the buyers links to Russia noted. A deal was then sealed this year that saw the state handed full ownership of the gas importing part of the business.
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