Slovak Generator’s Value Was Cut Before Sale to Enel, Fico Says

A police investigation at the Slovak unit of Enel SpA (ENEL) relates to accounting operations that cut the value of the country’s largest generator before it was sold to the Italian utility, Premier Robert Fico said.

“I am very glad that proceedings have begun in the case of Slovenske Elektrarne’s privatization,” Fico told journalists today in Bratislava, Slovakia. “Demonstrably, a revaluation of assets took place before the privatization that significantly reduced the value” of the power company.

Fico, an opponent of asset sales made by previous administrations, said the operation valued the generator at 32 billion koruna ($1.4 billion), the currency used in Slovakia before the 2009 switch to the euro. “Several weeks” after the sale, another review of assets raised the company’s value to 54 billion koruna, he said without elaborating.

Rome-based utility completed the purchase of 66 percent stake in Slovenske on April 28, 2006, or 19 months after it won the tender for the stake, beating Czech Republic’s CEZ AS. The investigation comes at a time when Enel prepares to sell the Slovak unit to cut debt.

An Enel spokesperson who asked not be named because of company policy declined to comment on Fico’s remarks. The company on July 24, a day after Slovenske’s offices were raided by the police, said that investigations are “apparently referring to acts that occurred in 2006 or earlier, so before Enel finalized the acquisition,” adding its staff is providing full support to the police.

The Italian company bought the majority stake for 840 million euros ($1.13 billion) and also pledged to finish construction of two additional reactors at the Mochovce nuclear plant. The state keeps the remaining 34 percent.

To contact the reporter on this story: Radoslav Tomek in Bratislava, Slovakia at rtomek@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net

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