The end game for the sale of Slovenské Elektrárne has been set out with Czech company EPH in the frame to become one of Europe’s major power players. But the scenario set out by current majority owner ENEL is far from clear.
You’d have to be a chess grandmaster to work out the next moves ahead for Slovakia’s biggest electricity company Slovenské Elektrárne and its possible future Czech ownership even after current owner, Italian ENEL, revealed more details of its plans yesterday. The problem is that this looks like a simultaneous game proceeding on a single board with some of the players having a few pieces up their sleeves.
Anyway, to the established facts. ENEL on Thursday confirmed that it will sell off its 66 percent stake in two stages. Stage one should see a smaller package of shares unloaded by the end of the year so that the problematic company does not have to be consolidated in ENEL’s 2016 accounts. The remainder, likely just under 50 percent, will be sold when nuclear power plants under construction, Mochovce 3 and 4 are completed, likely in two years time. So the sale seems to be going ahead and that itself had been in doubt.
To the bidders: ENEL said it has two firm offers. Czech energy holding EPH has confirmed it has put in an offer and the partnership of Hungarian owned Slovak refiner Slovnaft and Hungarian electricity company MVM is almost certainly the other. ENEL says a third bid is in the process of being completed. This could be from China National Nuclear Corporation, which apparently made its offer after the official closing date, with Finland’s Fortum also suggested in media reports as a further bidder.
At the same time though, ENEL says it is still leaving the door open for the Slovak government to make its own bid for shares, probably a 17 percent stake that could be tagged onto its existing 34 percent and give it a majority in the company prime minister Robert Fico says should never have been privatized in the first place.
Launching final talks with bidders in the next days and selling off one batch of shares while its probably not clear what stake the Slovak stake will have in the company, they have just appointed their own advisors, is a bit of a puzzling equation. But it could probably all work out after a fashion. Czech company EPH already has experience of performing a delicate balancing with the Slovak state in its shared ownership of Slovak gas company SPP and probably believes it can pull off the same cohabitation again. The Hungarian dominated consortium bid has reportedly indicated that it would even be content with a minority stake in Slovenské Elektrárne.
What does this all mean for the Czech Republic? Well, EPH, albeit heavily indebted, would leap from the second division into the first division of energy players in the region and in Europe with a scale similar to ČEZ. It would have a surplus of electricity which could easily be offloaded on the Czech market and around the region. Otherwise, there is the prospect of Hungarian, Finnish, or perhaps even Chinese energy companies on the Czech doorstep.
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