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SPP share for sale

FOR NOW Energetický a Průmyslový Holding (EPH) is the only company to have expressed an interest in purchasing the 49-percent stake in Slovak natural gas utility SPP currently held jointly by Germany’s E.ON Ruhrgas and Frances’ GDF Suez, the Hospodárske Noviny financial daily reported on September 21.

FOR NOW Energetický a Průmyslový Holding (EPH) is the only company to have expressed an interest in purchasing the 49-percent stake in Slovak natural gas utility SPP currently held jointly by Germany’s E.ON Ruhrgas and Frances’ GDF Suez, the Hospodárske Noviny financial daily reported on September 21.

“Our estimates [for the sale price] were somewhere between €2.5 billion and €3 billion,” Martin Chren, a former state secretary of the Economy Ministry, told the daily. The French and German investors acquired their SPP stake for Sk130 billion [now nominally equivalent to €4.32 billion, but worth considerably less in 2002] ten years ago. The former Economy Ministry during the Iveta Radičová government debated approving the transaction on condition that the state’s position in SPP was strengthened.

For the time being the sale of the stake to a new investor is subject to negotiations which are expected to be concluded within a few weeks. The deal will also need approval from the European Commission.

The Pravda daily reported that EPH has offered to pay the French and German investors €2.5 billion.
“If the purchase price is somewhere around this sum, it would be adequate,” said Peter Marčan, the head of the Institute for Energy Security, adding that based on the current profitability of the company the investment would be returned in between eight and ten years, which is regarded as a good ratio in the energy sector.

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