Battle Over Gas Company About To Ensue

A battle could be about to ensue for a lucrative stake in gas utility SPP, but with the new government things won’t be so easy. According to an article in today’s Hospodarske Noviny, Robert Fico and his new majority government will probably try to gain control themselves. Here provides you with an unofficial translation of the article as fair use extract copyright, as the article is in Slovak.

Hospodarske Noviny, 15 March 2012, Article by Petra Jamrichová

“We will fight for the share in Slovensky plynárensky priemysel”. That is the message that election winner Smer-SD is indirectly sending out to the Slovak and Czech billionaires of Energeticky a průmyslovy holding.

They are the ones that want to acquire part of the stake that was already privatised and which is held by the German E.ON Ruhrgas and French GDF Suez. “If it is to be purchased by some financial group as an investment, then that would be a very sad end to the story called privatisation. From the perspective of the state, it is not possible just to stand by and watch”, said vice-chairman of Smer Peter Kažimír in Interview of the Week published by HN on Monday.

The investors will convince the Holding, co-owned by Slovak financial group J&T, PPF of the richest Czech Peter Kellner and Daniel Křetínský, but the negotiations with the private shareholders on the purchase of roughly a quarter of SPP were halted after the fall of the government. It now wants to negotiate with the new one.

”We are clearly a strategic investor. Our interest in SPP is long-term. We believe that the offer that we submitted will prove that we really are a good partner and our entry to SPP will be positive for the state and the company”, reacted head of the holding Daniel Křetínský.
Kažimír also counts with negotiations.

At the same time, though, he admits that Slovakia is limited financially in its consideration to buy back the share and it will apparently be a problem to legally block the sale. “The state will do everything it can to protect its interests”, announced Kažimír.

The state wants to regain control

Most of all they want to prevent a potential new minority shareholder does not have a majority in the management bodies of the company. Yet according to lawyer Viliam Karas from Maple & Fish, any contesting of the shareholder agreement could only really be successful if a breach of it is demonstrated.

According to information of HN, another factor anchored in the agreement is that if E.ON Ruhrgas and GDF Suez, which control a 49% stake in SPP via Slovak Gas Holding, decide to sell their shares, the state cannot prevent them from doing it.
If the state wants to sue

“In such an event the shareholder agreement would not be breached and the state does not have a chance of being successful in the dispute over contesting the shareholder structure”, feels advocate Viliam Karas from Maple & Fish. He adds that we would only have a chance of being successful if the shareholder agreement were breached. “Meaning the sale of the share of Slovak Gas Holding or a change to the shareholder structure” explains Karas, noting that under those conditions the state could withdraw from the agreement and assume control over Slovenský plynárenský priemysel.

The conditions surrounding the sale of part or all of Slovak Gas Holding is governed by the shareholder agreement. It states that if the shareholder wants to dispose of 50 percent of Slovak Gas Holding, which basically represents a 24.5 percent share in Slovensky plynárensky priemysel, this doesn’t have to be with the state’s consent. Any greater share than that is subject to the approval of the Slovak Republic and the state can also exercise its right of first refusal.

If negotiations are on a larger sale than that presented to date in the media, the state headed by Robert Fico would be interested in acquiring the co-owner of Slovensky plynárensky priemysel.

The foreign partners are inclined to the sale because they are changing their business strategy and plan to develop on markets outside Europe.

Foreign shareholders are staying quiet

In reply to the question of Hospodárske noviny on whether negotiations with Energetický a průmyslový holding would continue, Adrian Schaffranietz from the Corporate communication department of E.ON Ruhrgas said they would not comment on the situation.

We also did not get an answer to whether they would be willing to sell the share back to the Slovak Republic again.
A decisive element here, though, will be the offered price for the sold share in SPP. Even though the Slovak Republic as a majority shareholder has right of first refusal, if some third party is also interested in the share and presents a higher offer, we will have to equal it. Otherwise nothing will come of the business.


  1. Well Huh ??? Ask any Slovak if their gas prices have increased in the last 10 years…????

    Only by x3times in 10 years . …not much to a daft Irishman, constantly drunk on his on opinion of himself .

    BTW. Donal Duck ….still inching closer to that degree in 2014 are we ?

  2. The last time the government owned this company it was haemorraging money from all ends. It’s now a highly profitable company and should be left in private hands. Ask any Slovak person if their gas prices have increased in the last 10 years… answer: not by much!

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