Enel Gets Bids for Slovak Assets From Central European Peers

Enel SpA, Italy’s largest utility, got at least two bids for Slovenske Elektrarne SA from central European companies as large west European operators held back.

Czech utility CEZ AS and a Hungarian group made up of MOL Nyrt’s Slovnaft and state-owned electricity producer MVM said they sent letters of interest in Enel’s two-thirds stake in Slovenske. Enel Chief Executive Officer Francesco Starace said Nov. 10 that the Italian company received three offers.

The effort to sell the assets has been complicated by an unfinished nuclear project at Mochovce beset by delays and budget overruns. Both CEZ and Slovnaft said they would need to examine the condition of the unfinished units in detail before binding offers could be made.

“We managed to find very little information on the state of Mochovce,” Slovnaft Chief Executive Officer Oskar Vilagi told journalists in Bratislava today. The state of the nuclear project will be “the key moment in our decision whether to submit a binding bid.”

Mol, which controls 98 percent of Slovnaft, has more than 4.5 billion euros ($5.6 billion) of available funds for potential acquisitions, Vilagi said. The company sees synergies with Slovenske Elektrarne as it could sell power in southeastern Europe which suffers from an electricity deficit, according to the executive.

Good Fit

The Czech government, which controls almost 70 percent of CEZ, has also said it sees Slovenske Elektrarne as a good fit for the Czech utility because of the two companies’ complementary portfolios and compatible grids.

Rome-based Enel is putting the assets for sale to cut its 44.6 billion-euro debt. Its disposal plan also includes selling part of its 92 percent stake in Spanish unit Endesa SA and its unit in Romania.

Enel bought its 66 percent stake in Slovenske Elektrarne, which meets 80 percent of Slovakia’s electricity demand, in 2006. The Mochovce budget has ballooned to 3.8 billion euros from 2.4 billion euros envisaged in 2007.

“We see further delays in finishing the Mochovce project and further rise in investment above 4 billion euros,” Patria Finance analyst Tomas Sykora said. “The most advantageous for CEZ would be an agreement with the Slovak government, which owns the remaining 34 percent in Slovenske Elektrarne, about sharing the risks connected with the project.”

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