German RWE Group's decision to freeze all acquisitions in Eastern Europe, including that of Electrica's Muntenia Sud branch has upset consultant PricewaterhouseCoopers' plans. The consulting firm is paid upon completion of a deal by a success fee, which amounts to a certain percentage of the price. The deal fell through, though, so that the company is now trying to make up by becoming involved in the reappraisal of other Electrica branches still not put up for privatisation, sources close to the talks say.
RWE's investment in Muntenia Sud, taken for granted last year by Dan Ioan Popescu, Industry and Resources minister back then (and currently Economy and Trade minister), has not materialised and relieved Electrica branch's privatisation schedule of every pressure.
RWE was initially supposed to participate by a capital inflow to the establishment of a joint venture at Muntenia Sud, which many people regard as "Electrica's crown jewel" and whose market value amounts to more than 200 million euros, as certain estimates show. RWE's change of plans eventually led to exceeding the deadlines set in the privatisation schedule for this branch, which both PricewaterhouseCoopers and the Office for State's Interests and Industrial Privatisation admitted.
The consultancy is now discussing the schedule of this transaction with Electrica SA, taking the "new approach" into account.
"The change in the conditions on the international and especially on the European utility market required us to reconsider our vision of the transaction anticipated for Electrica Muntenia Sud. To that end, our client, Electrica SA, requested us to change the initial approach, which led, as we had previously agreed upon, to completing certain stages beyond the deadlines initially set, " Radu Stoicoviciu, head of PwC's Corporate Finance & Recovery division told Ziarul Financiar. adrian.mirsanu@zf.ro
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