Montenegro exclusive: Italy A2A CEO Ravanelli says its time for a decision on the sale of Power utility EPCG shares

27. May 2014. / SEE Energy News

I think that now is the right time to make a decision on a possible sale of shares in Montenegro Power Utility Company EPCG, said Director General of the Italian A2A Renato Ravanelli, addressing to the shareholders of that company, especially to the officials of Milan and Brescia.

“The completion of undersea cable construction is planned between the 2015th and 2016th, and this will undoubtedly affect the investment strategy. We will have to think hard, because if we continue to invest in Montenegro we will do that in order to create additional value. Otherwise, we will have to reinvest in other projects, and other countries”, said Ravanelli when presenting results of the A2A in the first quarter, reports the Italian media

Ravanelli announced this in the midst of negotiations with the Montenegrin government about the continuation of the management agreement in EPCG, which expires in October.
Negotiations on management, also depend on the negotiations on the collection of the EPCG tax debt of 45 MEUR, on supplying the Aluminum Plant at a cost of 38 EUR per megawatt-hour, which seeks Uniprom, as well as the outcome of EPCG claims towards KAP of 45 MEUR, which be difficult to collect.

The Italians, according to earlier information, agreed to supply the KAP in the next five years at a cost of 38 EUR per megawatt-hour with transmission, but a final agreement has not been reached. Thereafter it was said that price was not acceptable for A2A, but they could deliver electricity to the end of the year for 45 EUR, and from next year with a discount of 5.5 percent. The latest information from the Government says that experts’ teams agreed with the Italians about discount.

SDP also got involved in the negotiation and agreement with A2A, on which conditioning the collection of 45 MEUR of EPCG tax debts has become the integral part of the budget law. It was supposed to be charged until 31st March, but due to negotiations on three fronts, and it was postponed because A2A proposed the model of the shares issuance of 0.01 EUR per share, where it would not use the right of purchase. After the operation, the Government would have a 57 percent of the shares, two percent more than now, and the Italians two percent less.
The collection of the tax debt over emissions and electricity prices for KAP should be confirmed at the general meeting of shareholders, which has been postponed twice. The Board of Directors should make decision by the end of May whether decide about them on a regular Assembly or earlier on an extraordinary Assembly.
Italian media reported that EPCG had 20 million of earnings before amortization, taxes and loans in the first quarter, and it is expected, according to the Italian media, that it will have good results this year.
In 2009th A2A purchased 43.7 percent of the shares for 436 MEUR.

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