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Monday, November 08, 2004

CEZ and E.ON named highest bidders

Czech company CEZ submitted the best bid for the takeover of Electrica Oltenia, as did the Germans company E.ON in the bid for Electrica Moldova.

The two bidders submitted offers for both suppliers, said Dorin Mocea, the head of the Economy Ministry's privatization department. Romanian authorities will start negotiations with the two bidders to select the winner for each supplier.

The Romanian State, which is the current owner of the two companies up for sale, instructed bidders to improve their binding offers, which in these cases are not part of the final bids.
Unlike with other privatizations in the electricity and natural gas industry, the authorities this time introduced the binding bids as a prior step to the final offers.

In this situation, CEZ and E.ON will still be able to improve their binding bids for each of the two electricity distributors, something that could affect the final stage of bidding.

Spain's Union Fenosa (UNF.MC), which was also on the short list, didn't place a bid.

The government is offering a 24.62% stake in Electrica Oltenia and Electrica Moldova, with the new owner required to gain a majority stake through a share capital increase. The two companies supply electricity to the southwestern and northeastern parts of the Romania country respectively.

Electrica Oltenia has 1.36 million customers and sells 6.8 million megawatt- hours a year, while Electrica Moldova has 1.3 million customers and sells 4.1 million MWh a year.

CEZ bids alone for the two companies and is ready to invest up to EUR1 billion in Romania into various energy projects, Vladimir Schmalz, the head of CEZ mergers and acquisition department.

Earlier this year Romania sold two other power suppliers to Italian power company Enel SpA (EN). Enel agreed to pay EUR36 million directly to the Romanian state, and to make a capital injection of EUR76 million to acquire 51% of Electrica Banat and Electrica Dobrogea.

Posted by Iulia Rasoiu : 11/08/2004 11:15:00 am