Bidders line up for Eurogen
With the deadline for the submission of bids for its Eurogen subsidiary having passed, Italy’s Enel will be carefully vetting the bidders along with its advisors Credit Suisse First Boston, Lehman Brothers and Merrill Lynch. Eurogen is the second generating subsidiary to be sold off by Enel – the sale of Elettrogen to Spain’s Endesa for 22.63bn having been approved by the European Commission in early September.
Eurogen owns 7008 MW of capacity and could fetch as much as 24bn ($3.66bn). It is the largest of the three generating units being sold off by Enel in which the Italian government owns a 68 per cent stake. The proceeds of the sale may be used to fund an early dividend payment to the Italian treasury, according to Italian press reports.
Among those expected to have bid are RWE of Germany, Spain’s Suez and Mirant of the US. The Italian government has prohibited bids from any company more than 30 per cent government owned which would exclude both Italy’s Eni and Electricité de France.
EC approves Montedison takeover
Europe’s competition commissioners have approved the takeover by the Italenergia consortium of Italian industrial group, Montedison. It came as a surprise to many observers who expected the involvement of Fiat and Electricité de France (EdF) to be a stumbling block.
The regulator’s approval did, however, come with a proviso, that they would reopen the case if state-owned EdF – Europe’s biggest power company and Fiat’s junior partner in the deal – begins to exercise control over Montedison. The Montedison group includes power generator Edison – the only real rival to Enel in the Italian energy market.
It had been expected that the commissioners might have used their powers as a way of opening up the European energy market. France and Germany have so far refused to agree a fully liberalized market.
Fiat has a 38.6 per cent interest in Italenergia with EdF holding 18 per cent of the equity, but is limited to two per cent of the voting rights. Italian banking interests hold the balance of the stock along with Franco-Polish investor Romain Zaleski who holds 20 per cent.
The Commission may soon decide on the legality of an Italian decree limiting EdF’s voting rights in Montedison to two per cent.
Neta has delivered price cuts says UK regulator
UK electricity and gas regulator Ofgem delivered a report at the end of August which says that the Neta electricity trading arrangements for England and Wales has performed well in its first three months and delivered price reductions of 20-25 per cent compared with last year. In a separate report on the impact to small generators, the regulator concludes that greater government subsidies may be needed if the UK is to meet targets for the production of “green” energy.
Ofgem accepted that it would take time for the market to bed down as the market responds to new price signals and incentives. He said that, where needed, rule changes would be made.
With Neta now established, US energy company Dynergy has launched its “Dynergydirect” e-commerce portal into the UK market. Dynergy’s customers in the UK will now have access to Dynergy’s bid and offer prices for UK power in the English and Welsh electricity market and UK natural gas at the National Balancing Point.
“New Force” in market is delayed
Plans to establish a “New Force” in the European electricity power market have been delayed. The admission of a hold-up came in comments made by a spokesman for Swedish utility Vattenfall – one of the partners in the project.
The concept, announced in April this year by Vattenfall, and Mirant Corp., was to unite their shareholdings in four German utility groups, Hamburg utility HEW, Berlin’s Bewag, Veag and Laubag, a mining company and form the third largest power group in Germany.
The release of a “masterplan” outlining the structure of the new company has been delayed indefinitely as a result of lingering questions about the role of Bewag in the new group, said Markus Baluska, spokesman for Mirant Deutschland. But this may not delay the creation of the group beyond the target date of mid 2003, said Baluska.
French nuclear sector renamed
Areva is the new name for the revamped French nuclear sector. The reorganization entails the disappearance of Framatome and the creation of a holding group which will have a majority controlling interest in the Atomic Energy Commission.
The holding group will comprise two areas – Cogema and the nuclear arm of Framatome will constitute the first sector, while Framatome subsidiary FCI and the government holding in STMicroelectronics makes up the second.