4/4/2005

E.ON bought Romanian electricity distributor for €100 million

BUCHAREST – Romania sold the majority stake in domestic electricity distributor Electrica Moldova to German energy industry group E.ON for €100 million. The Ministry of Economy released the information today. On Wednesday, the Romanian government will sign a contract for the sale of another electricity distributor – Electrica Oltenia – to Czech company ČEZ.

ČEZand E.ON agreed in advance that they will both buy 24.6 percent stakes in the distributors and then will increase them to 51 percent by means of capital raises. Local media report that ČEZ is supposed to pay roughly €150 million for acquiring majority in Electrica Oltenia.

The Ministry announced that E.ON will pay €31.4 million for 24.6 percent of Electrica Moldova’s current shares. After a capital raise, which is to take place on June 30, E.ON will buy new shares in the value of € 68.6 million to increase the stake to 51 percent, reports Reuters.

The sale of Electrica Moldova will take place on the day already announced by Minister of Economy Ioan‑Codruts Seres. In March, the minister also announced that the contract for the sale of Electrica Oltenia to ČEZ will be signed by the government on April 5.

Privatization of domestic electricity distributors is a key element of the process of restructuring of Romanian public energy industry. The restructuring is required by international financial institutions as well as the European Union, which Romania is expected to join in 2007.

Source: Czech News Agency (ČTK)