Montenegro accelerates takeover of A2A shares in EPCG

The Government of Montenegro intends to increase the ownership in public power utility Elektroprivreda Crne Gore (EPCG) in May from 57,01 to 70,16%, instead of initially planned 63%.

This is envisaged by the Proposal of the Contract on the execution of put option, which the Montenegrin Government adopted and submitted it to the National Assembly, without holding the session and on the basis of the obtained opinion of the majority of its members.

According to the Government statement, in addition to acquiring two-thirds ownership and adequate shareholding rights, the state is already restoring its ownership stake in EPCG to the level before the partial privatization and capital injections in 2009, when the Italian company A2A became co-owner.

“The proposal envisages that, instead of the first tranche of EUR 35.7 million for 7,826,438 shares, the state will pay EUR 68.9 million for 17,252,885 shares, and will increase the ownership from 57.01 to 70.16% instead of, initially planned 63%”, the Government announced.

The remaining shares will be repurchased by EPCG and by the state through the buyback scheme, in accordance with the Companies Law.

The Government of Montenegro said that in comparison with the basic version of the contract from August 2016, the new one accelerates three times termination clause, creating preconditions for drafting the development and investment plans in the EPCG, but also achieving significant financial savings of EUR 20 million.

At the beginning of June 2017, the Italian company A2A decided to sell its stake in the EPCG.

The put option is defined by a shareholder agreement between the Government and A2A and foresees the sale of A2A shares in the EPCG for EUR 250 million in seven installments starting May 1, 2018.