Last stage in Electrica Muntenia Sud privatisation Nine O’Clock, May 10, 2006
by Matei Harnagea
Bucharest – All five giants from the European market of electricity distribution remained in the final stage of the privatisation process of the Romanian distributor Electrica Muntenia Sud. They all submitted yesterday the final offers for taking over the 67.5 per cent of the shares held by the state in this company, according to official sources quoted by Mediafax. Thus, the last stage of the privatisation process finished, and now the offers are to be opened by the privatisation commission.
The competition however was strong and intensified by the moment of submitting the final improved offers, especially that the decision to include five giants on the short list of privatisation suggested that the initial financial offers were very close in terms of value, otherwise, the privatisation strategy stipulated the selection of only one bidder for the continuation of negotiations, in case its offer would have been much superior than the others. The company’s privatisation method is similar to the other four privatisation of the local companies for electricity distribution, namely the winner of the bid will buy directly half of the shares in Electrica Muntenia Sud, and later, a capital increase will be operated, by which the share of the future shareholder will go up to 67.5 per cent. Regarding the price that the Romanian state might receive for the share package held in the electricity distributor that supplies the Capital and other two neighbouring counties, the privatisation commission remarked in a press communiqué from March the high competitiveness of the submitted offers, which could lead the total value of the transaction to a record value in this sector of the Romanian market, namely over EUR 750 M. “Taking into account the high level of competitiveness and the quality of the offers and in view of directing the investors in submitting the improved offers, on grounds of the mandate assigned by the coordination privatisation commission, Electrica SA, as seller, expects that the value of the transaction regarding the 67.5 per cent package would exceed the level of EUR 750 M,” mentioned the communiqué sent to the press right after the announcement of the five short-listed companies in the privatisation process.
Thus, the estimated value could be almost double, as compared to the sums cashed from the other four privatisation in the field, namely Electrica Banat, Electrica Dobrogea, Electrica Oltenia and Electrica Moldova. The future owner of the electricity distributor that supplies over one million subscribers will be chosen from the five finalists, namely CEZ (Czech R.), Enel (Italy), Gaz de France, Iberdrola (Spain) and RWE Energy (Germany). Two of the finalists, namely CEZ and Enel are already present on the Romanian market, as the Czech company bought last year 51 per cent of Electrica Oltenia for EUR 151 M, and Enel is already the owner of Electrica Banat and Electrica Dobrogea.