Hungary pulls out of race for Slovenske Elektrarne

By bne IntelliNews October 20, 2015


The Hungarian consortium that put in a binding bid for Slovakia's dominant power producer Slovenske Elektrarne is no longer interested in doing a deal, senior officials said in comments published on October 20.

The consortium, featuring Slovak refining and fuels group Slovnaft - owned by Hungary's group Mol - and Hungarian state power holding MVM, is dropping its bid to acquire a stake SE from Italian utility Enel, the CEO of Slovnaft told “We do not communicate with Enel anymore,” Oszkar Vilagy commented.

The claim was backed up by COO of Mol. The company, 24% owned by Budapest, notified Enel the "other day" that "considering the previously announced terms it cannot take further steps" with its offer, Sandor Fasimon told

The Hungarian withdrawal leaves EPH as the only confirmed bidder in the Enel tender. The Czech-based energy holding has already started exclusive negotiations with the Italians. Enel originally wanted to sell its full 66% stake in SE, but under huge pressure from the Slovak government, it is now looking to sell only a minority interest for the time being. 

Meanwhile, Bratislava is apparently seeking to raise its current 34% to a controlling stake. Enel said in the summer it will now sell the stake in at least two tranches. 

The withdrawal of the Hungarian consortium is not surprising, therefore, but has taken some time to be officially announced. Mol and MVM suggested several times they would not be interested in acquiring a minority stake. Vilagy reiterated the point in July, and said the pair had raised its offer.

EPH - which has always held a clear advantage as Bratislava's favoured partner in any joint venture - was selected by Enel as the preferred bidder in August. The owners of EPH, from Slovak financial group J&T, are reportedly on good terms with Slovak Prime Minister Robert Fico.

The Hungarian consortium now says Enel has stopped providing it with information about progress at Mochovce. Alongside the likelihood of state control, the long-delayed and over-budget expansion of the nuclear plant is the other major risk for any bidders for SE.

The first of the two units is expected to start commercial operation in November 2016, with the second to follow a year later. The cost of the project was initially projected at €2.8bn, but has been increased to €4.63bn. Enel is expected to remain a minority shareholder until the completion of the nuclear project. 

Vilagy added that the Hungarian companies now see economic risks associated with the the nuclear project. Czech state-controlled utility CEZ - originally seen as perhaps the front runner in the race for SE – flagged up the issue over a year ago. CEO Daniel Benes also said ahead of his company's official announcement that it would not bid that any investor buying into SE without the blessing of Bratislava would be "crazy". 


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