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Government wants limit on ELMŰ, ÉMÁSz dividend payments

History

After a cabinet meeting in which plans to transform Hungary’s utility companies into non-profits were detailed and discussed, government spokesman András Giró-Szász told media that a limit on dividend payments by power supply companies ELMŰ and ÉMÁSz is sought.

“The most important thing is that no dividend payment would be possible from funds earmarked for network maintenance and development,” stated Giró-Szász at a press conference on Wednesday. MP Szilárd Németh, who is heading the government’s special committee on utility price cuts, claimed that “Siphoning dividends out of the companies may put supply safety at threat.”

In addition to the announcement of the prospective dividend limit, Németh also informed that an investigation of the finances of ELMŰ and ÉMÁSz will soon be underway.

The two items together are bleak news indeed for private interests with stakes in Hungary-based utility companies: A stock-market analyst who wished to remain anonymous was quoted in a Wall Street Journal report as reckoning that “Sooner or later, the government will force the [foreign-owned] energy suppliers to their knees and they will exit.”

Germany-based RWE and EnBW Energie Baden-Wuerttemberg AG each hold substantial stakes in ELMŰ and ÉMÁSz: RWE holds stakes of 55.3% and 54.3%, respectively, in the companies; EnBW owns 27.3% and 26.8%, respectively.

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