First payment to A2A for withdrawal from EPCG by May 2018

The Government of Montenegro intends to pay the first installment to the Italian company A2A for its shares in Montenegrin electric power company, Elektroprivreda Crne Gore (EPCG), before the deadline expires in May 2018. By then, the government will also examine other payment options foreseen by the contract with the Italian company, the Ministry of Economy of Montenegro said.

A2A officially launched the withdrawal procedure, after its contract expired on July 1, offering to the Government of Montenegro to take over its 41.7 percent of EPCG shares for EUR 250 million and to pay it in seven annual installments, as defined by the Put Option.

The deadline for the payment of at least one seventh of the agreed sum will expire in May 2018, and the Government doesn’t plan to extend it, the Montenegrin daily Vijesti reports.

In addition to the model of payment in seven annual installments, the contract also allows several other options, but no decision has been taken yet, the sources in the Ministry of Economy told Vijesti. The daily asked whether it was decided on the payment model and whether the government considers possibility to pay at once with the discount as well how much the discount would be.

The Ministry of Economy said that the Government, in an effort to choose an optimal model, would consider all available options by time the deadline expires.

After A2A launched the withdrawal procedure, The High Court in Podgorica blocked its shares at the request of the Special Prosecutor’s Office. In April 2016, the Special Prosecutor’s Office launched an investigation against six EPCG managers. The investigation was launched on suspicion of misuse of official position and damaging the company for millions of Euros in favor of the Italian companies A2A, A2A Reti Elettriche and BAIN Milano.

The Italian company has appealed the Court’s decision. Montenegrin officials said that the court’s decision to block A2A shares will not jeopardize the takeover procedure launched in early July.