Austrian firm new majority stakeholder in Macedonia's ESM Distribution

27/03/2006

EVN AG won the tender for a majority stake in ESM Distribution, offering 225m euros and pledging to invest an additional 96m euros during the next three years.

By Marina Stojanovska for Southeast European Times in Skopje -- 27/03/06

EVN AG is the new majority shareholder of ESM Distribution, having won the tender that was launched on 9 December. The Austrian firm offered 225m euros for the majority stake and pledged to invest an additional 96m euros during the next three years.

According to the Tender Commission, EVN received 256.24 points for its bid. The second-ranked bidder, the Czech firm CEZ, won 201.16 points, followed by Italy's ENEL with 64.98 points.

"On behalf of all citizens, I welcome EVN and wish it successful co-operation," Economy Minister Fatmir Besimi said. "I am expecting development of the energy sector in such a way as benefits the citizens."

According to Peter Layr, a member of EVN's board of directors, the sale is a symbol of Macedonia's progress towards integration in the EU. "It is not only the size of investment that is important but the opening of great potential for other service rendering activities and improvement of the power supply," he said.

Macedonian Prime Minister Vlado Buckovski said comparative analyses have shown that this is the highest price ever achieved for a power utility in the region. "This is the confirmation of the good business climate in Macedonia," he said.

According to Buckovski, the Macedonian Parliament will decide how the revenue from the sale is to be spent. "There are several development projects but which one will be approved still depends on the next parliamentary composition," he said.

An EVN press release lists several reasons for the company's interest in Macedonia. One is that Macedonia is approximately the same size as Austria. A second reason is the Balkan country's EU membership candidate status.

Great potential for investment in the energy sector exists in Macedonia, as well as for investment in gas, water and thermal energy resources, the press release adds.

The EVN group provides electricity, natural gas and water to more than 1 million consumers in Austria and Bulgaria. It has majority shares in Bulgarian power distribution companies in Plovdiv and Stara Zagora. The company finished last year with pre-tax revenues of 335m euros.

Distributed by year, EVN should invest 35.5m euros in ESM Distribution during the first year, 31.5m euros in the second year and 29m euros in the third year.