This was decided on Monday without a session being held, based on the opinions of most government members, when the contract was sent to Parliament for discussion.
“The contract proposal states that instead of the first tranche in the amount of 35,7 million euro for 7.826.438 shares, the government would invest 68,9 million euro for 17.252.885 shares, already during May 2018. This would increase the owner share in the Montenegro Energy Company (Elektroprivreda Crne Gore) from 57,01 to 70,16 percent. In this way, besides the acquisition of a two-thirds stake, the state is immediately returning its owner share in EPCG to the level before partial privatization and recapitalization in 2009,” the government has stated.
The remaining shares will be taken over by EPCG through the mechanism of acquiring its own shares, in line with the law. The contract also includes the option of returning to the primary scenario in case any of the planned tranches in acquiring its own shares are not able to be realized.
“In comparison with the primary version of the contract from August of 2016, the new contract achieves three times faster realization of the severance clause of strategic partnership, preconditions are being met for the definition of clear development and investment plans in national energy service, but also a significant financial savings in the amount of 20 million euro. This new contract confirms the responsible attitude of the state to its commitments,” stated the government .
To recall, the conditions for the announced acceleration were met with the recent adoption of a budget rebalancing when 70 million euro were allocated for A2A shares of the energy company. In this way, as was announced recently by Economy Minister Dragica Sekulić, the state ownership of EPCG would be increased.
The option of an accelerated exit was probably bolstered with last week’s successful emission of Montenegro euro bonds on the international market in the amount of 500 million euro. The government has previously stated it is better to end the partnership with A2A sooner than in seven years.
In July of last year, A2A announced it has failed to find a buyer for its shares and notified the government of the option activation.
Sekulić said a month ago in Parliament that such a move by A2A means they do not wish to develop EPCG further. Announcing talks with potential investors after the Italians bowed out, the Minister stated the sale of the shares will depend on what the potential investor’s plans are.
“It is our intent for a large number of investments to be realized in EPCG in the coming period. It is better to do so with an investor, although EPCG is capable of doing so on its own,” explained Sekulić at the time.
A2A has been managing EPCG since 2009, when it bought 43 percent of shares for 430 million euro.
Translated from Café del Montenegro, click here for the original.