Consortium wants bigger stake in SPP

THE CONSORTIUM currently holding a 49 per cent stake in Slovak gas distributor Slovenský plynárenský priemysel (SPP) says that if the law is changed, it will buy additional shares.
Germany's Ruhrgas and Gaz de France (GdF) agreed to purchase the 49 per cent stake in SPP last spring, in a deal that had to be approved by both the European Union and Slovak monopoly commissions.
Ruhrgas is wholly owned by E.ON, which also holds significant stakes in Slovakia's largest electricity supplier Západoslovenská energetika, several local combined heat and power schemes, and has shown an interest in power generator Slovenské elektrárne.

THE CONSORTIUM currently holding a 49 per cent stake in Slovak gas distributor Slovenský plynárenský priemysel (SPP) says that if the law is changed, it will buy additional shares.

Germany's Ruhrgas and Gaz de France (GdF) agreed to purchase the 49 per cent stake in SPP last spring, in a deal that had to be approved by both the European Union and Slovak monopoly commissions.

Ruhrgas is wholly owned by E.ON, which also holds significant stakes in Slovakia's largest electricity supplier Západoslovenská energetika, several local combined heat and power schemes, and has shown an interest in power generator Slovenské elektrárne.

The third member of the consortium, Russian gas giant Gazprom, backed out of the deal in July 2002, keeping an option to buy up to one-third of the minority stake - an option it may exercise by the end of this year.

Gazprom and GdF have been working together since 1976, and GdF has just extended existing agreements with Gazprom for the annual supply of 8 billion cubic metres of natural gas. The company says it would be in favour of Gazprom taking up its 16.3 per cent stake in SPP.

"We think that the structure of the international consortium with Gazprom as a supplier of natural gas is very advantageous," said Phillipe Boucly, its representative on the SPP board of directors.

Any further share purchase by the consortium is currently blocked by Slovak legislation, which allows the government to sell only 49 per cent in companies deemed to be vital to the national interest.

"The sale of the remaining shares controlled by the government in strategic companies depends on a political decision. We are monitoring the situation and waiting for the sale of SPP shares held by the government," said Boucly.

The international consortium has an option to buy the remaining stake in SPP if the government decides to sell it.

No price for the remaining share of the company has yet been set, but Boucly considers that it would be higher than the original stake bought in January 2002 for $2.8 billion (2.6 billion euro) to reflect the value added to the company since the consortium took over.

He added that the European Bank for Reconstruction and Development might play a role in the event of the sale of the remaining stake in SPP.

Over 50 per cent of SPP's sales of natural gas within Slovakia are to large corporate clients. However, its domestic sales are dwarfed by transit sales. In January 2003 SPP transported 7 billion cubic metres of gas via its transit pipeline network, mainly from Russia to western Europe.

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