Montenegro: Power utility EPCG sues securities commission over shareholders dividend payments

, SEE Energy News

The Commission for Securities annulled the decision of the Shareholders Assembly of EPCG on the reduction of the base capital and the payment of 35 million euro to shareholders.

Elektroprivreda (EPCG) has initiated a lawsuit before the Administrative Court against the Commission for the Securities (KHOV) because the Commission annulled the decision of the Shareholders Assembly of EPCG on the reduction of the base capital and the payment of 35 million euro to shareholders.

“After the potential positive decision EPCG is ready to fulfill its obligations towards its shareholders,” stated from this company.

According to data from the website of the Administrative Court the first hearing for the dispute has not yet been scheduled, and since it is not possible to predict how long could this trial last it could take months for shareholders before they get their money if the court does make such a decision. Shareholders should receive 0.26 euro per share.

in June last year Shareholders Assembly of EPCG adopted a decision on the coverage of accumulated losses and the reduction of base capital to cover accumulated losses and payments to shareholders, allowing them to divide the so created surplus of 35 million euro among shareholders.

Subsequently EPCG sent to the Commission for Securities an application for registration of the base capital reduction in the registry of emitents, which is a prerequisite for dividing the money.

In November it was said from the commission that at the session in September they rejected the request of EPCG as incomplete. EPCG stated then that they only found out about the decision from the Commission in mid-November, and that they will decide on further activities in the following period.

According to the number of shares  the Government, would have received 19.9 million out of this number, the Italian company A2A would get 14.6 million, and the remaining two and a half thousand small shareholders would get about half a million.

Although the representative of the State in the Assembly of EPCG voted for the decision to reduce capital and cover losses, the Government was against the division of money to shareholders. Executive authorities felt that it was more needed to direct this money for projects such as the construction of the second block of TPP Pljevlja. A2A insisted to get the money, among other things, in order to justify to its shareholders the investment in Montenegro, because with decisions to delete losses EPCG became a profitable company, which now may regularly share dividend.

Despite months of negotiations the Government and A2A have not yet reached an agreement on future cooperation in EPCG. It is possible that there will be a termination and then the Government would have to buy shares from A2A in EPCG.

The State has a 57 percent share in EPCG, the Italian partner A2A has 41.7% and everyone else have around 1.2 percent, transmits