©THE HEREN REPORTS - Italy�s Enel signs privatisation agreement for majority stake In EMS
Italy’s power incumbent Enel signed the privatisation agreement on Monday (11th June) for its majority stake in Romanian electricity distributor Electrica Muntenia Sud (EMS), Enel announced. EMS was formerly owned by Electrica, a 100% subsidiary of AVAS. The transaction is valued at EUR 820 million. Enel plans to acquire 50% of the shares initially for EUR 395 million after which it will purchase a further 17,5% of the company (total 67,5%) for EUR 425 million. From 7th June until the actual date of the share transfer to Enel, Electrica will continue to control and manage EMS, during which Enel will participate in the management of the company as an observer. Once the shares have been transferred, Enel will manage the company operations. The Minister of Economy and Finance in Romania, Varujan Vosganian said in a statement: “Investments in the Romanian energy sector will amount to approximately EUR 30 billion up to 2020. Out of this amount, the state contribution, through the state-owned companies or from the budget, will be of 20-30%. The modernisation of the energy sector depends on private investments”. Vosganian said that should Romania succeed by 2015 in having 4 nuclear units operational and also to increasing the hydro capacity, the country would be able to produce 70%-80% more electricity that at present and could triple exports. The acquisition forms of Enel’s plan to invest an additional EUR 2 billion in the Romanian distribution sector over the next 15 years. The Italian power major is also set to invest EUR 1 billion in modernising Romania’s power network. The other EUR 1 billion would be invested in regional distribution companies Enel Electrica Banat and Enel Electrica Dobrogea, which Enel already owns. Electrica Muntenia Sud is the fifth distribution company privatised by Romania, and one of eight regional electricity distribution companies. The total number of EMS customers amounts to about 1,1 million with a network spanning over more than 45,000 km. In 2006, EMS distributed about 4,5 TWh of electricity and registered sales in excess of EUR 450 million. Electrica Muntenia Sud is the sole electricity distributor for consumers in Bucharest, the residential and industrial areas on the outskirts of Bucharest, Ilfov county, and in the county of Giurgiu. (THE HEREN REPORTS - EDEM 11112 / 12 June 2007)

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