Monday, October 15, 2012

Ministries do not recommend state purchase of SPP shares



The Czech company Energeticky a prumyslovy holding (Energy and Industrial Holding, EPH) will most probably become the new owner of 49 % shares in Slovak Gas Enterprise (SPP). The Ministry of Economy has not recommended Slovak government to use its pre-emptive right in their purchase. 

„The use of pre-emptive right for reversal purchase of 49 % of SPP is possible in principle, however from the view of time schedule, state of the public finance, effort to strengthen control over the deficit development and decrease of debt of the Slovak Republic it is not an optimum solution,” reads a document submitted by the ministry of economy. 

Foreign investors GDF Suez and E.ON Ruhrgas have previously announced the intent to sell their shares and have started negotiations with Czech EPH since then. 

Discussion of Slovak government on the assessment results is scheduled for this week. 

Neither the finance ministry recommends state purchase of the shares.  Their main argument is the lack of possible financial resources in state financial assets and negative impact on public budget. 

The ministry of economy elaborated two options how to acquire the minority shares. Slovakia would either have to use public finance, which the finance ministry preferred, or to obtain acquisition credit from private sources. Both options were assessed as negative. 

“We suppose that the position of SPP majority owner, i.e. the state, might be improved through negotiating of more advantageous conditions in the framework of new shareholders´ agreement,” ministry of economy argued. 

According to proposal of basic principles of the new agreement Slovak state should re-gain its decision powers in the board of directors. Currently the state has only 3 board members out of 7. 

See also: After "immoral proposal" Fico wants a quick sale ...

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