Montenegro’s utillity EPCG to halve minimum price for sale of 10% stake

After two failed bidding rounds for the sale of a 10% stake, Montenegrin state-owned coal and power producer Elektroprivreda Crne Gore said the government can decide to switch to the stock market and open the possibility for more than one entity to purchase the shares.

Time is running short for EPCG to sell a package of 10% of its shares that it bought off from former minority stakeholder A2A. The second public call for a new partner ended without any bids, so the Montenegrin state-controlled utility intends to change the approach.

First, the coal and electricity producer revealed it is willing to sell the stake for a minimum of EUR 4.49 per share, which would value the package at EUR 53 million. It compares to EUR 8.63 apiece from the last failed round. However, the current price on the Montenegro Stock Exchange is just EUR 3.51 per share.

Shares could be sold on continuous basis at Montenegro Stock Exchange

EPCG said the government should decide as soon as possible whether to launch an auction, in line with the rules of the Montenegro Stock Exchange, for the sale to one or more buyers, or allow the company to continuously sell the stock in the free market. The first two attempts were for a so-called block transaction, where only a single buyer could acquire the stake.

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

The only remaining option is to write off the package, which was paid EUR 52.9 million in 2019 and has EUR 77 million in book value. The deadline for the stake to switch hands is September 26. The shares currently carry no voting rights.

EPCG seen taking over Željezara steelworks

EPCG is based in Nikšić, Montenegro’s second-largest city. It has 877 MW in installed power capacity. The company operates the country’s only coal power plant – Pljevlja, hydroelectric plants Perućica and Piva, and five small hydropower units.

Of note, Prime Minister Dritan Abazović said today that the government gave EPCG a green light to negotiate with Turkey-based steel maker Tosçelik on taking over its struggling Željezara plant, which is also in Nikšić.

The employees’ committee highlighted a recent project to build a solar power plant for own consumption at the location of the steelworks.