Stake in Gas Utility Looks Set to be Sold

The alleged sale of the foreign shareholder’s stake in gas utility SPP has caught the attention of all major media. Here The Daily provides you with an unofficial translation of an article published in today’s Pravda daily in line with Fair Use Extract Copyright.

By Michal Holeš

No longer will only Slovaks, French and Germans decide about Slovensky plynárensky priemysel, but now also Czechs. The new owner of part of the stake is supposed to be Czech company Energetický a priemyselný holding, forty percent of which is owned by the financial group J&T. Spokesman for the holding did not confirm or reject the information. “I cannot give any comment on this” said spokesman of the holding Martin Maňák. He justified his statement by saying that the company would not comment on a deal that has not been concluded yet.


photo (c) James Riden

A similar stance was employed by J&T and the energy group PPF. A one fifth share and the top post in the holding is held by one of the youngest Czech billionaires Daniel Kretínský, who co-operates heavily with J&T on the Czech market. J&T has been active in the energy sector for a long time. Maňák would also not answer the question of whether the company will purchase a share from German energy concern E.ON Ruhrgas.

According to information from several well-informed sources, the subject of the deal supposedly concerns precisely this part of shareholder rights. The sources did not say, though, whether the whole 24.5% stake of the German shareholder would be sold or whether it would be just part of it. The company did not confirm information about the sale of the stake. “Sorry, but I cannot provide a standpoint yet,” spokesman for the company E.ON Ruhrgas Kai Krischnak told SITA.

The portal wrote that following the transaction, the seller could receive 30 billion Czech koruna, which when converted is EUR 1.24 billion. At the time of the privatisation of SPP, the 49% shareholder stake was sold for 121 billion koruna, which at the exchange rate from March 2002 meant approximately EUR 2.86 billion. The attractiveness of SPP is falling for the investors. As recently as 2006 the profit of the company exceeded EUR 830 million. Since then the net earnings have been falling and last year had dropped to EUR 561 million.

Another fact that supports information about the sale of the stake of the concern E.ON Ruhrgas in SPP is the announced gradual shutdown of nuclear power stations in Germany. Energy experts project that although the country will be able to substitute part of nuclear energy with electricity generated in wind power plants, massive investments await it. Well-informed sources also say that the German shareholder in SPP is tired of the battle with the Slovak regulatory authority, which last year threw several price hike proposals off the table requesting a hike in gas prices for households, and at the end of the year it increased the price by just under 4.5 percent.

Last week the regulator once again rejected a proposal to increase prices in two steps by a total of almost thirty percent, increasing the price of gas by just 7.3% on average instead. The change of shareholder rights will not take place directly in SPP, but in the company Slovak Gas Holding, controlled by GDF Suez and E.ON Ruhrgas, with this company owning the 49% stake in SPP together with managerial powers. This is also why the 51% percent shareholder in SPP, the Ministry of Economy, is left out of the equation.

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