©THE HEREN REPORTS - Enel wins Romania�s Electrica Muntenia Sud tender
Italian Enel submitted the winning bid for Romanian distribution company Electrica Muntenia Sud, securing the tender for a 67.5% stake from the Romanian government with a bid of EUR 820 million.
The price includes both the sale of 50% of the shares and a simultaneous capital injection to acquire 67.5% of the distribution company, according to a statement from the company on Tuesday (6th June).
The company signed the contract on Monday (5th June), but Romania’s Office of State Ownership and Privatisation in Industry (OPSPI) stated that government approval for the acquisition was likely to take several weeks.
Spanish power utility Iberdrola was announced as coming second in the bid, and if final negotiations with Enel fall through, the government will begin talks with that company. However, details of Iberdrola’s bid were not disclosed, and a spokesman had no comment to make.
The full stake was originally valued at over EUR 750 million. Analysts assessed the bid as slightly high, but were generally optimistic that Electrica Muntenia Sud represented a strong growth prospect with complete market liberalization due in 2007. The company’s revenues were EUR 398 million in 2005, with a net income of EUR 20 million.
Electrica Muntenia Sud serves more than 1.1 million customers, and represents around 11% of the Romanian electricity market by volume, selling over 4.5 TWh annually. With this sale, 61% of the Romanian market is now privatised. Enel also holds stakes in regional distribution companies Electrica Banat and Electrica Dobrogea in Romania. The company acquired 66% of Slovenske Elektrarne in Slovakia in April and also has a presence in Bulgaria with the Maritza III power station. It has a stake in a major Russian power trading company and operates a 450 MW combined cycle plant serving St Petersburg.
The Italian utility plans to continue its expansion into Central and Eastern Europe, and has stated its interest in a stake in the proposed Belene nuclear power plant in Bulgaria as well.
Four of Romania’s eight power distribution companies are already privatised, and consultants have been hired to address the privatisation of Transilvania Nord and Transilvania Sud.
The other bidders in the final round were CEZ from the Czech Republic, French gas giant Gaz de France and Germany’s RWE.
(THE HEREN REPORTS - EDEM 10.107 / 6 June 2006)

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