Bulgaria to Float Minority Stake in E.ON Utility in 2-3 Months

Business » ENERGY | November 27, 2010, Saturday // 09:33
Bulgaria: Bulgaria to Float Minority Stake in E.ON Utility in 2-3 Months The measure is part of an anti-crisis package the government adopted in April and aims to raise some BGN 250 M from the sale of its minority stakes on the Bulgarian Stock exchange. Photo by Sofia Photo Agency

Bulgaria's government will list in two or three months its 33% minority stake in E.ON, one of the three power distributors in the country, to enliven the local stock exchange and boost revenues, the finance minister announced.

"The financial analysis of the electricity distribution company is ready, which means that the state-owned stake will be listed on the Stock Exchange in about two or three months," Finance Minister Simeon Djankov said at a meeting with business people from the city of Stara Zagora.

Earlier in the year Economy and Energy Minister Traicho Traikov expressed the hope that the listing will trigger huge interest among investors. According to him revenues are expected to equal those from the tobacco monopoly sale, which are estimated at between BGN 80 M – BGN 100 M.

Bulgaria, struggling to cover its widest budget deficit in a decade, plans to sell minority stakes in other energy utilities as well.

In 2004, the Balkan country sold 67% in its three power distributors to Germany's E.ON, Austria's EVN and Czech CEZ. E.ON serves households in North-Eastern Bulgaria

Fifty companies, currently managed by the economy ministry, will go into the recently set-up State Consolidation company, which bundles minority stakes in state-owned firms prior to sale, the government decided earlier this year.

These are operating companies, which are not on the "prohibited list" that features state-owned, banned from privatization companies, such as Bulgartransgas, the gas pipeline operator.

The measure is part of an anti-crisis package the government adopted in April and aims to raise some BGN 250 M from the sale of its minority stakes on the Bulgarian Stock exchange.

The money raised will be a contribution to closing the BGN 1.5 B budget deficit that emerged in the first quarter of 2010. The total effect of the 60 anti-crisis is supposed to amount to BGN 1.6 B.

Bulgaria's government has revised up to 1% its economic growth forecast for this year, pinning its hopes for expansion on recovering exports.

Prime Minister Boyko Borisov's government previously estimated the economy would grow 0.3% after a contraction of 5.1% in 2009 as investments dwindled and consumption shrank.

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Tags: Traicho Traikov, Simeon Djankov, consolidation company, EON. CEZ, EVN, stock exchange

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