Italy's energy group Enel will invest 200 million euros to acquire 51% in each of the two electrical power distribution branches Electrica Banat and Electrica Dobrogea, sources close to the deal told Ziarul Financiar. Since the acquisition of the controlling interests is done by capital increase, the State will directly collect only 70 million euros, which account for 24.6% in the two branches.
"Enel will be paying more than 100 million euros cash for 51% in Electrica Banat and less by up to 20% for Electrica Dobrogea as the latter is smaller," the quoted sources added.
At first, the Italians will pay about one third of the entire value of the deal for the direct acquisition of 24.6% in each of the two distributors, with the rest contributed by Enel for the new shares issued and equal to 35% of the increased share capital of the two branches.
"This money will serve to capitalise the two companies and will be possible to use as working capital later, namely for investment programmes or other purposes," the sources said.
The Italians had initially offered a lower amount than mentioned above but raised their bid after several rounds of negotiations.
The two branches had accumulated 5,000-6,000bn ROL (some 120 million euro) debts together at some point, part of which will be cancelled under a governmental ordinance. "It is about debt derived from non-performing receivables that will be gradually extinguished," the quoted sources explained without revealing any figures in this regard.
As for the investment programme to be run by Enel following takeover of the two distributors, the same sources say Electrica Banat will see about 30 million euros a year invested, while Electrica Dobrogea will get about 25 million euros a year by 2009.
Enel was the only investor left in the race for the privatisation of the first two Electrica branches, as the other pre-qualified contenders, Public Power Corporation (Greece), EVN AG (Austria) and BKW (Switzerland) backed out many months before bidding for any of the two companies. This left the State with no choice other than to conclude the privatisation deal with Enel or start the process again.
Electrica Banat accounted for 10% in Electrica's 1.9bn euro turnover in 2003. It services Arad, Timis, Caras-Severin and Hunedoara Counties, supplying 850,000 clients with electrical power. Its share capital was worth 81.6 million euros in late 2003.
Electrica Dobrogea accounted for 8% in Electrica's 2003 turnover. It supplies power to 590,000 clients in Constanta, Tulcea, Calarasi and Ialomita Counties. Its share capital was worth 58.9 million euros in late 2003.
Enel's annual revenues reach 31bn euros. It is one of the largest integrated energy groups in Europe. Its controlling interests are held by the State and the rest of the shares are listed on the Milan Bourse and NYSE.
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