Government of Montenegro pays EUR 15 million for additional stake in EPCG

The Government of Montenegro bought an additional 2.8% stake in Elektroprivreda Crne Gore (EPCG) at today’s auction at the Montenegro Stock Exchange.

State-owned coal and power producer EPCG offered 10% of its own stock today at an auction. The Montenegro Stock Exchange said the government bought 2.8% or 3,34 million shares for EUR 4.49 apiece, which was the starting price.

The transaction was worth EUR 15 million in total and the rest of the package remained unsold. The government earmarked the funds yesterday. Earlier it approved the company’s request to offer the stake for sale at the national stock exchange, following two unsuccessful tenders.

The deadline for the sale of the shares, owned by EPCG itself, expires on September 26. It is obligated under law to write off the remaining stock. It means the government would own 99% of the company.

Minister Damjanović: Writing off the shares would cause damage to Montenegro

Minister of Finance Aleksandar Damjanović said yesterday that the price of EUR 4.49 per share is much lower than in previous sales. He pointed out that the government is improving EPCG’s liquidity this way.

With the latest move, the government also prevented the sale of the 10% stake to another bidder as it would enable them to enter into ownership and get a board seat in EPCG, which means they could block the government’s strategic decisions about the company, in his words.

Writing off the shares would cause indirect damage to Montenegro, he asserted.

Outgoing Prime Minister Abazović earlier said EPCG should buy the troubled Željezara steel plant in Nikšić from Turkish company Tosçelik. The share auction was envisaged for raising funds for the acquisition.

EPCG dropped 2.56% today to EUR 3.6 apiece at the exchange’s free market segment, translating to EUR 414 million in market capitalization. The book value is almost two times higher.