Tight negotiations with the state, cutthroat competition, more than 20 lawyers working around the clock to finalise the contract, and a total value exceeding 1bn euros, including investment commitments, are some of the features of the privatisation deal of the year in which Italian company, Enel, gained control of the so called "crown jewel" of the Romanian energy sector, Electrica Muntenia Sud.
"If we take into consideration the investments pledged by Enel, the deal goes well beyond one billion euros. In terms of size and importance, this is definitely one of the top deals in recent years, which Musat & Asociatii has provided consulting services for (...)," stated Miruna Suciu, a partner with the Musat & Asociatii law firm and coordinator of the team of lawyers involved in Enel's takeover of Electrica Muntenia Sud. Musat represented Enel in the privatisation deal.
The state finally received 820m euros, from which it will get in 394.8m euros in cash in exchange for 50% of the stock, with the remaining money to flow into the company in the form of a capital increase. PwC consultancy, Norton Rise and Radu, Taracila, Padurari and Retevoescu - RTPR lawyers all worked on behalf of the state in the deal.
The privatisation contract was finally signed a week ago.
The final value of the deal came as a surprise, as when the winner was announced, almost a year ago, the initial calculations put the value of the company at 400m euros. In the end, the state received the sum in exchange for half of the entire stake alone.
"Negotiations with the state are always difficult.
In particular the tight competition surrounding Muntenia Sud's privatisation resulted in difficult negotiations (...), says Suciu.
Besides some strictly legal aspects, the finalisation of the privatisation process was delayed due to numerous additional factors.
The takeover of Electrica Muntenia Sud and particularly the price the deal was struck at indicate a very important characteristic: the extremely favourable circumstances, which are strictly temporary, make it imperative for future privatisation processes to be accelerated.
Suciu maintains it is the duty of the state to make use of these favourable conditions, given the increased interest from some very reliable foreign investors, in particular utility companies with expertise in this field.
"Of course, besides the imminent privatisation projects and raising investors' interest, I want to specify that the energy segment is about much more than just privatisation.
There are also greenfield projects, as well as mergers and private acquisition projects, without the involvement of the state or state-owned companies, whose frequency and value we expect to see increase in the coming years (...)," says Suciu.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
