The Board of Italian energy group Enel has endorsed the final bid for the majority stake in two branches of the Romanian power distributor, Electrica: Electrica Banat and Electrica Dobrogea. The Italians will announce their committing bid for the two companies next Monday.
Officials of the Italian group, the only investor still in talks with the Romanian State after the other candidates quit the race, had initially announced an investment plan worth 1.2 billion euros, to upgrade the power network, which would run for 15 years at the two distribution companies. On the other hand, given the significant investment plans, the Italians had not made a very generous offer for the companies' stock.
However, the Ministry of Economy, which owns the electricity distribution companies, has suggested the Italian investor to cut down the value of the investment programme and up the offer for the stakes, instead. The Romanian State should endorse the deal with Enel by the end of June, in line with the latest pledges made by Premier Adrian Nastase to the European Union.
For the privatisation transaction, Enel is assisted by London Economics (which provides counseling for regulatory issues), Ernst&Young and by local law firm Musat & Asociatii. In its turn, the Ministry of Economy is advised by French bank BNP Paribas and by the local law firm Nestor Nestor Diculescu Kingston Petersen. Also, the National Authority for Power Regulations (ANRE) has retained Germany's Kema Consulting.
One of the main negotiation issues between Enel and the Romanian authorities is the distribution tariff, which the Italians would like in line with the prices levied on the other markets in the area, having suggested the Bulgarian model. According to ANRE experts, enforcing the Bulgarian structure can bring a 50% surge in the distribution tariffs, with the final price to go up 15%, whereas the Authority has confined the energy price increase to 4% for this year.
The takeover of Electrica Banat and Electrica Dobrogea would allow the Italians access to 17% of the Electrica portfolio of 8.5 million subscribers.
adrian.mirsanu@zf.ro
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