THE ITALIAN energy group Enel has appointed Deutsche Bank and BNP Paribas to advise it on the sale of the controlling stake the group holds in the Slovak major electricity generating company Slovenské Elektrárne (SE). The sale of the 66-percent stake in SE is part of plans by Enel to sell €4.4 billion of assets to cut net debt to around €37 billion by year-end, Reuters wrote on July 5.

While bankers approached by Reuters say the whole company could be worth more than €3 billion, Michal Šnobr, analyst of J&T Banka, says that the price of the 66-percent stake would depend on potential guarantees for the future operation of the new reactors of the nuclear power station in Mochovce, meaning the stance of the Slovak government is relevant to the value of the controlling stake.

“The current price of an annual supply of electricity at the adequate market is below €35 per MWh,” Šnobr told the Hospodárske Noviny economic weekly. “Costs for completion of Mochovce indicate a minimal price for its viable operation above €80 or even higher. Thus it will be very complicated to set the price of the stake.”

The completion of Mochovce is one sticking point when it comes to the relationship between SE and the Slovak government. The project to complete the two units of the Mochovce nuclear power stations is being delayed and its latest official price-tag of €3.8 billion is increasing too. The original €2.8-billion plan was to complete the third unit in 2012 and the fourth in 2013. While the Italian partner explains the delay as well as higher costs mostly by additional changes incurred by the project after the Fukushima accident, for the Slovak side this means allocating additional funds and postponed incomes from the sale of electricity generated by the new reactors. The still unresolved privatisation of SE is another open question related to SE.

Enel bought the 66-percent stake in SE for €840 million in 2006 as part of the Slovak government’s privatisation drive, and has invested billions of euros to modernise its facilities. The Slovak National Property Fund owns the remaining 34-percent stake while the Economy Ministry administers the ownership rights on behalf of it.

The list of companies which may be interested in acquiring the majority stake in SE includes the Czech energy company ČEZ, the Czech Energetický a Průmyslový Holding (EPH), French GDF Suez, and some Russian companies, including Rosatom. The latter option is being linked with concerns of Slovakia’s increasing dependence on Russia. Slovakia already imports from Russia nuclear fuel for its nuclear power stations as well as most natural gas. Recently, the Russian bank Sberbank, in cooperation with its Slovak and Czech affiliations, provided SE a loan of €870 million.