No bids for 10% stake in Montenegrin power utility

Montenegro utility EPCG receives zero bids 10 shares

Photo: EPCG


August 3, 2022






August 3, 2022





The August 1 deadline has passed and state-owned coal power producer Elektroprivreda Crne Gore (EPCG) failed to attract any offers for a 10% stake. The company waited for almost three years since it bought out a minority partner, so now it may need to write off the share package.

Shanghai Electric Power was the only major investor that expressed interest in buying 10% of EPCG, Vijesti reported. However, there were no envelopes with bids to open on August 1, when the deadline expired.

The Chinese company is the majority owner of Možura, one of Montenegro’s two wind farms. Before it took over the facility, the project was linked to a corruption affair in Malta, which is under investigation in the Balkan country as well, the article notes.

EPCG said in April that it would sell a 10% stake to a strategic partner. President of the Board of Directors Milutin Đukanović denied the transaction was intended for neighboring Serbia’s EPS, also a struggling state-owned firm.

The 10% of shares that were offered for sale as a package, so that only one investor would enter ownership, must be written off if they don’t change hands by September 26. Namely, EPCG bought the stake from its former minority partner A2A three years ago. The stock is owned by the company and carries no voting rights.

EPCG’s sought over two times more than market value

The Government of Montenegro controls 88.7% of the shares and, thus, 98% of votes. Đukanović said EPCG is about to lay out a plan how to avoid the writeoff, nominally valued at EUR 77 million.

One share package bought from A2A was already written off

Actually, the company sought a minimum of EUR 8.63 per share, which would make the 10% stake worth just north of EUR 100 million. But EPCG currently trades at less than half that at the at the Montenegro Stock Exchange, just EUR 3.51 per share. In addition, the book value is EUR 6.52 per share.

The utility paid EUR 52.9 million to Italy-based A2A in 2019 for 11.8 million shares. Before EPCG acquired the stake, it wrote off a package of 13.1 million stocks it previously bought from the same partner.

CEO Đukanović is optimistic about development projects

Đukanović also said the company hired many young experts in the past 16 months and that any criticism is unfounded. He promised to roll out development projects and remain open to quality hires.

Rooftop solar panel programs Solari 3000+ for households and Solari 500+ for firms will result in additional annual power production of 45 GWh, which translates to EUR 18 million, he pointed out.

EPCG is facing a high import bill because of the impact of the severe drought on its hydropower plants. Furthermore, it is conducting an expensive reconstruction of Montenegro’s only coal power plant, Pljevlja, which will need to suspend operations for in the later phase.

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