BUSINESS IN SHORT

Economy Ministry prepares unbundling of SSE power distributor

THE ECONOMY Ministry is preparing the unbundling of trade and distribution activity in Stredoslovenská energetika (SSE), the regional power distributor in central Slovakia.

Unbundling should be completed by January 1, 2007, SITA wrote, referring to a proposal prepared by the Economy Ministry.

A 100-percent subsidiary, Stredoslovenská energetika-Distribúcia (SSE-D), which originated this April thanks to the unbundling, will be used for SSE to deposit part of the company, including assets inevitable to operate a distribution network as of January 1, 2007.

Due to the separation of assets and obligations related to distribution activities in SSE-D, deposited assets will have to be revaluated through a non-cash deposit of part of the company in its share capital.

"Deposited assets will be revaluated on the difference between their book value as a historic value of deposited assets and their real value stemming from an expert estimate of part of the company to be deposited in SSE-D share capital," the ministry said.

According to the Economy Ministry, unbundling of the distribution company should secure effective and non-discriminatory access to the distribution network for other electricity producers and distributors. "The process should result in increased possibilities for electricity distribution, higher liberalization of the electricity market and, thus, increased competitiveness on this market," the Economy Ministry states.

Newly established SSE-D will secure activities connected with distribution network operation, including supervision over the distribution network, distribution of customer services, distribution controlling and distribution network administration.

SSE is a power distributor and supplier. It operates in Žilina, Banská Bystrica and part of the western Trenčín region, where it supplies and distributes electricity to 690,000 customers.

Electricité de France acquired a 49-percent stake in SSE in October 2002. The remaining shares are still controlled by government privatisation agency the National Property Fund, yet shareholder rights are exercised by the Economy Ministry.

Last year, the company made a taxed profit of Sk2 billion (Ř50 million).

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