Enel Reviews Slovakia Exit as State Seeks Control of Utility

Enel SpA is reassessing a plan to sell its entire 66 percent stake in Slovenske Elektrarne after Slovak Prime Minister Robert Fico said the government wants to gain control of the utility and prevent a sale to a third party.

Enel will seek to sell “the first tranche” of its stake this year, but is committed to finishing the construction of the Mochovce nuclear power plant in line with the Slovak government’s wishes, Chief Executive Officer Francesco Starace said Wednesday in the country’s capital Bratislava. There are “lots of different scenarios possible,” he said after a meeting with Fico.

Enel had previously set a goal of selling its entire Elektrarne stake and exiting Slovakia this year as part of the Rome-based company’s strategy of reducing debt. Fico said the government, which holds the remaining 34 percent of the power utility, wants to gain a controlling share.

“The Slovak government will enter talks with Enel with the aim of boosting our position in Slovenske Elektrarne,” Fico said on Wednesday. “Our aim is to gain a majority in Slovenske Elektrarne and have control over its management.”

Fico said the government won’t take part in the bidding process that ends May 9, but negotiate separately with Enel. The government will also block any deal with a third party until the Italian company finishes the nuclear project, he said.

“In the coming weeks the process started by Enel will be stopped,” Fico said. “If we aren’t reassured that Mochovce will be finished, we will work very actively against any deal.”

The government has said a change of Elektrarne’s ownership would further delay the construction of the Mochovce plant, a project whose budget has almost doubled to 4.6 billion euros ($5.1 billion) from an initial 2.4 billion euros. The current plan is to finish two new units in 2016 and 2017.

Separately, the government is asking Enel for 492 million euros in withheld income from running the state-owned Gabcikovo hydropower plant after a court found the management contract invalid.

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