Bulgaria will not sell the JSC Varna power plant to RAO UES of Russia unless the Russian company enters into a contract on the terms provided for by the tender (it has undertaken to pay €578.8 million), Bulgaria’s Economy and Energy Minister Rumen Ovcharov said yesterday. RAO UES has offered to redeem this power plant in association with Italian-based Enel, but this is not in keeping with the tender conditions. Yesterday, RAO UES said that its position remained unchanged and talks with Bulgaria's privatization agency went into the final stage.
Mr Rumen Ovcharov said yesterday, "Bulgaria cannot waste time any longer. Either we make an agreement with RAO UES, or launch talks with the participant which made the second largest bid, or the procedure will have to be launched anew." The "option of cancelling the deal is the likeliest," according to him. He promised to wait "till the weekend, not longer."
The deal has been postponed for different reasons six times since May this year. In May, RAO UES won tenders to buy the thermoelectric power plant (TPP) in Varna (a capacity of 1,300 MW) and a TPP in Ruså (400 MW). However, the Bulgarian Competition Protection Commission allowed the Russian company to buy only one facility, in Varna, to prevent establishing a monopoly in the power market.
Yet RAO UES has never ventured to make a contract to buy the plant's shares. Once the tender results were summarised, it became clear that the Russian company had seriously overpaid for the asset. Bulgaria's Privatisation Agency has told Kommersant that RAO UES offered €680.85 per share of OJSC Varna and €24.93 per share of Ruse. The bids of the second contender, Czech-based CEZ, were much more modest at €335.5 and €5.05 respectively. Italia's Enel and Greek-based Public Power Corp. offered even less. In these conditions, RAO UES decided to save its reputation: it consulted Enel and offered the Bulgarians to buy the power plant for the same amount in association with Enel.
The Privatisation Agency told Kommersant yesterday that it was impossible to change the tender results, so TPP Varna shares could only be sold to RAO UES alone. Otherwise, the agency would face lawsuits. If the deal is terminated, the agency will launch talks with CEZ.
In response, RAO UES reported that talks with Bulgaria's Privatisation Agency had gone into the final stage and they would be over by New Year. RAO has not yet decided to give up Varna, according to Kommersant's information, but no one will go to Sofia until the end of the week. Thus, if Mr Rumen Ovcharov's threat is implemented, RAO is quite likely to miss the Bulgarian power plant. |
