Slovakia and EPH lining up to buy Slovenske Elektrarne

By bne IntelliNews April 28, 2015

bne IntelliNews -


Slovakia is "hugely interested" in increasing its stake in power producer Slovenske Elektrarne (SE), Prime Minister Robert Fico said on April 27, in a move that is likely to chase away other suitors for Enel's 66% stake apart from preferred local operator EPH as the May 9 deadline for binding bids approaches. 

Earlier this month, Fico said the government was putting together a plan to raise its holding in the country's dominant power producer and was examining whether to use the proceeds from the upcoming IPO of its 49% stake in Slovak Telecom to fund it.

The government has attacked Enel's planned sale of its 66% stake in SE ever since it was announced last summer. Fico has long criticised the privatisation of the utility in 2006 by the previous centre-right government for ceding management control. "Our 34% stake is useless, everything is in the hands of the partners," Fico told Slovak business daily Hospodarske Noviny in comments published on April 27. 

Bratislava has also insisted that Enel should finish the long-delayed and over-budget construction of two new nuclear reactors at the Mochovce plant before selling. “The government will obstruct the sale of 66% of SE, because I feel that our Italian friend wants to flee its responsibility,” Fico told HN. “Enel must finish the construction of units three and four of the nuclear power station Mochovce.”

Bratislava has carried out this threat over recent months through police raids, demands from the government for additional payments connected to the privatisation, and the takeover of the Gabcikovo hydro-electrical plant SE was operating. 

The pressure from the state and the likelihood that it will bid itself has already led Czech utility CEZ, the onetime favourite, to say recently that it is now less interested in bidding for the Italian company's stake.

CEZ CEO Daniel Benes hinted in March that any suitor would be crazy to go ahead without Bratislava's blessing. 

However, local group Energeticky a Prumyslovy Holding (EPH), which has co-operated with the Slovak government before, announced on April 27 that it is not giving up its interest.

"EPH seeks to verify if it is possible to find a solution that would be in the interests of Slovakia and Enel and in which EPH could play a meaningful role," the company said, according to Reuters. 

EPH, controlled by closely-held Slovak financial group J&T, has already done a very similar deal. In 2013 it bought EDF Suez and E.ON out of their 49% stake in Slovak gas utility and pipeline operator SPP. During that sale Fico's government also put off bidders as it tried  - but failed - to regain management control from the minority shareholder.  Last summer, Bratislava bought EPH out of the loss-making gas sales unit, leaving the Czech-based company with the lucrative distribution and transmission parts of the business. 

Apart from CEZ and EPH, a consortium of Hungary's MVM and MOL have showed interest in SE, while Finnish energy producer Fortum was also reportedly eyeing the company. 

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