February 2, 2009 / 11:25 AM / 10 years ago

Montenegro selling 18.3 pct stake in power firm

PODGORICA, Feb 2 (Reuters) - Montenegro put on sale on Monday a smaller-than-planned stake in its power monopoly and gave potential bidders an end of April deadline to submit offers for 18.3 percent equity in Elektroprivreda Crne Gore (EPCG).

Of 18.3 percent stake on offer, 9.15 percent of the equity will be sold out of existing capital and a further 9.15 percent will be a new share issue to boost the capital of the power company, the state-run Agency for Restructuring and Foreign Investment said.

The government had initially planned to boost EPCG’s capital by 22 percent through a new share issue.

To qualify, bidders must have produced or distributed at least 1,500 gigawatt-hours of electricity in the last fiscal year, revenue of at least 250 million euros ($321.2 million), assets worth at least 500 million euros and credit ratings of at least ‘BBB-‘ assigned by Standard & Poor’s or Fitch, or ‘Baa3’ by Moody’s.

The investor will get a five-year management contract and will be obliged to buy out a stake from small shareholders at the same price it pays to the government.

EPCG, 70.6 percent owned by the state, posted a 7 million euro loss in 2008. The company is estimated to be worth around 1 billion euros.

Without new power-generating facilities for 25 years, Montenegro lacks on average 35 percent of its electricity needs a year. The government expects the sale of EPCG stake to improve its position in the regional market in the future.

According to earlier media reports, Norwegian Statkraft [STATKF.UL], Italian ENEL [ENEFN.UL], Chinese Des and Czech CEZ CEZPsp.PR have shown interest in partnering with EPCG.

The former Yugoslav republic of 650,000 people ended its loose union with Serbia in 2006 and has since enjoyed strong growth, mainly driven by tourism.

The economy is estimated to have grown by 8 percent in 2008, but the International Monetary Fund expects Montenegro’s economy to grow by up to 2.0 percent in 2009. (Reporting by Dusko Mihailovic; Writing by Gordana Filipovic; Editing by Adam Tanner and David Holmes)

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