Montenegro’s power utility EPCG seeks buyer for 10% stake

Montenegro s power utility EPCG seeks buyer 10 stake

Photo: EPCG


July 18, 2022



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July 18, 2022



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Elektroprivreda Crne Gore (EPCG) is preparing to sell 10% of its shares to a single buyer. The company wants a minimum of EUR 8.63 per share even though it currently trades at just EUR 3.85 per share.

After declaring in April that it intends to sell a 10% stake to a strategic partner, Montenegro’s state-owned coal and electricity producer EPCG now issued a public call for energy companies and investment funds to send bids for the block transaction, which means a single buyer would take over the entire package.

The utility’s shares jumped 9.7% today at the Montenegro Stock Exchange, to EUR 3.85 apiece. However, EPCG seeks bids of at least EUR 8.63 per share, equivalent to just above EUR 1 billion in market capitalization. In comparison, the book value is EUR 770 million, and the current share price values the company at just EUR 455 million.

The public call is for energy companies and investment funds

Eligible energy companies have at least 1 GW in installed capacity or a minimum EUR 500,000 in equity capital. The public call is also open for investment funds listed in an organized capital market that have positive financial results over the past three years, at least EUR 1 billion in capital and investments in the energy sector of a minimum of EUR 100 million over the past five years, EPCG said.

Bidders must submit a bank guarantee worth at least 5% of the minimum price set for the package. The deadline for sending is August 1, when the opening of the envelopes is scheduled. If more than one participant offers the same highest price, the one who sent in the bid first will be declared the winner, the documents reveal.

The deadline for submitting offers is August 1, when the envelopes will be opened

Montenegro owns 88.7% of EPCG’s stocks and has 98% of the voting rights, as the company itself is the owner of 10%. The operator of coal mines, the Pljevlja thermal power plant and hydropower plants acquired the stake of 11.8 million shares in 2019 after a put option was exercised to buy out Italian minority shareholder A2A.

The 10% stake carries no voting rights and the company is obligated to sell or write it off by September 26. EPCG bought it from A2A for EUR 52.9 million. The government said last year that it would seek foreign partners for the utility’s wind and solar power projects.

EPCG must sell or write off the 10% of its shares that it bought off from former minority owner A2A

EPCG said in the public call that it has 877.4 MW in gross installed capacity. It runs hydropower plants Perućica and Piva and small hydroelectric units Podgor, Rijeka Mušovića, Rijeka Crnojevića, Lijeva rijeka and Šavnik. Among other projects, the company is preparing to build hydropower plants Komarnica and Kruševo and several gas plants.

It owns 100% in the country’s power distribution system operator CEDIS, coal mine operator Rudnik uglja Pljevlja, its Serbian subsidiary EPCG d.o.o. and EPCG-solar-gradnja, which designs builds and maintains photovoltaic systems. EPCG, which had 1,006 employees on March 31, also holds 51% in Zeta Energy, based in Danilovgrad.

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