Who’s gonna supply electricity to the Government?

The result of the competition for the acquisition of 67.5% of the Electrica Muntenia Sud subsidiary shares could be made public these days. The acquisition counts for the energetic companies’ European supremacy.

The result of the competition for the acquisition of 67.5% of the Electrica Muntenia Sud subsidiary shares could be announced these days, according to an official of the Bureau for the State’s Allotments and for the Industry Privatization (OPSPI), which takes care of the transaction.

The Muntenia Sud subsidiary is the Electrica "subsidiary", because it supplies electricity to Bucharest, and to the Ilfov and Giurgiu counties. It has the highest density of profitable clients, and the Government, the Parliament, and the Presidency are under its administration.

CANDIDATES. CEZ (Czech Republic), ENEL (Italy), Gaz de France (France), Iberdrola (Spain) and RWE Energy (Germany). These companies filed final offers for Muntenia Sud. The market specialists estimate that ENEL and RWE Energy are the favorites. RWE is seeded 22nd in the latest Top Platts of the most powerful 250 world integrated energetic (hydrocarbons and electricity) groups. ENEL is seeded 24th while Iberdrola is the 43rd. The specialists say that the top does not necessarily give the order of the favorites for Muntenia Sud.

"The ones that know the European market say that only 7 of the 10 European leaders will continue to exist. Iberdrola, not very well represented on the Eastern Market, and CEZ (122nd in Top Platts) could offer more in order to remain amongst the great ones", an important analyst of the Romanian energetics stated for us. Gaz de France does not appear in the Top.

OFFERS. "Ziarul Financial" (the Financial Newspaper n.e.) says ENEL seems to have offered approximately 820 million euros, and Iberdrola offered about 770 million euros. The minister of Economy, Codrut Seres, only confirmed there have been filed two final offers of more than 750 million euros. This sum had been previously suggested in a surprising statement of the subsidiary owner, Electrica Trade Comp.

INTERESTS. The Gaz de France strategy is to become a powerful integrated company. However, the interest in Muntenia Sud has almost disappeared because the French Government wants the merger with the Suez Group (27th in Top Platts). This way Suez-Gdf would be the fifth greatest European electrical current supplier. A few years ago, the Romanian officials were encouraging RWE to believe they would be awarded a fair negotiation for EMS, according to the autochthonous energetic experts. "RWE did not make time for the chit-chat with us, and, now, they regret", the quoted analyst believes. However, during their PR campaign, the Germans were not so satisfied by the sum demanded by the Romanians.

CEZ is isolated and only has Electrica Oltenia in its Portfolio. The Czechs complain about the fact that the Romanian producers use to skip them and go buy from intermediates. The negotiations would transform radically if they had Muntenia Sud in their portfolio. They have three billion euros for the acquisition of companies, especially for the ones in the Balkans. CEZ seems to be more generous: "We will not pay fabulous sums". Is 750 million "too" fabulous?

There can only be one winner, so the state prepares some new super-offers, besides the Rovinari, Turceni and Craiova plants. It is hard to believe that, only by coincidence, everybody speaks now about the mergers of the hydroelectric power plants with the thermal power plants in order to have new companies ready to be sold.