Let the Battle for the Gas Utility Begin
Gas utility Slovenský plynárenský priemysel (SPP) could end up being controlled by the Polish, as an article in daily Pravda today reveals interest from Polish giant PKN Orlen in the 49% stake that looks sure to be sold, which has already spoken to government representatives.
Other prospects for the share include Czech company Energetický a průmyslový holding, which has been in talks with the French and German owners of the shares, E.ON Ruhrgas and Gaz de France, which also enjoy managerial control in the gas company. A change of owner must be endorsed by the 51% shareholder, though, i.e. the Slovak Republic.
Yesterday, Prime Minister Robert Fico ruled out that the government would have the money necessary for SPP to return under state control. “If the state had as much money as the cost of the 49% stake, then the state should buy it back. Unfortunately, though, in this misery left by the government of Iveta Radicova the state does not have it”, said Fico.
The PM can imagine, though, that the government could improve its position thanks to the deal, by gaining a majority of seats in the Board of Directors. The state relinquished managerial control to the privatisation investors back in 2002, giving them 4 seats in the 7-member Board of Directors. This is because with a change of relations, the government has the chance to negotiate new terms.
”Under certain conditions the state could push for a majority (in the Board of Directors), because a majority belongs to the state. It is a legitimate question on whether the conditions will not change now”, Fico explained. Another option is a trade-off with the new owner, exchanging shares in the parent company SPP for those in the subsidiary Eustream, which operates the lucrative gas transit system (generating EUR 830 million in 2010, for instance).
SPP has been in a dispute for years with utilities regulator URSO, which the company claims has been setting prices for the regulated segment of households too low for years, making this segment loss-making and violating the EU rules on prohibition of cross-subsidies. Fico’s government plans to revert to its old law, which subjects all price decisions to approval by the General Meeting, and not just by the Board of Directors, as is the case at present.