Opus to buy out Czech partner from Mátrai Erőmű

Deals

Just days after announcing completion of the indirect acquisition of a 72.66% majority in power station Mátrai Erőmű through a joint venture with Czech integrated energy utility EPH, Hungarian listed holding company Opus Global announced on Monday that it has agreed to buy out its Czech partner in two steps.   

According to an announcement on the Budapest Stock Exchange website last week, Status Power Invest, a unit of Opus Global, acquired 36.33% of shares in Mátrai Erőmű through the joint venture Mátra Energy Holding, owned 50-50 by Status Power Invest and the Prague-based Energetický a Průmyslový Holding (EPH). Opus Global is a listed company controlled by Lőrinc Mészáros, an oligarch and investor close to the government and Prime Minister Viktor Orbán.

Opus now says it will buy out EPHʼs 36.33% indirect stake in Mátrai Erőmű, initially by acquiring an additional 35% of Mátra Energy Holding from EPH, and - once regulatory approval is secured - the Czech firmʼs outstanding 15% stake in the JV by June 20, 2019.

Business news portal vg.hu noted that the Hungarian and Czech partners justified their decision by saying that their concepts differed regarding the long-term operational and development strategy of the company - which it noted is a highly significant concern in terms of Hungaryʼs national economy and electrical energy supply. Mátrai Erőmű owns the Mátra Power Plant, Hungaryʼs second-biggest generator of electricity, as well as the countryʼs biggest solar park and two lignite surface mines.

"In recent months it has become clear that we think differently about how to handle the companyʼs problems than our Czech partners," Opus Global board member Gellért Jászai noted in a statement released by the holdingʼs PR agent, quoted by vg.hu. "While they have been thinking essentially about the reorganization of the company, we want rather to enhance efficiency and preserve jobs through innovative development of the power plant and technology, and if necessary the building of a new block."

The transaction will require regulatory approval. Previously, to complete the original acquisition of the stake in Mátrai Erőmű, Mátra Energy Holding had to obtain permission from the Hungarian Energy and Public Utility Regulatory Authority (MEKH), as well as from the European Commission.

Opus said the group of companies owned by Mészáros will obtain management rights in Mátrai Erőmű once the first step of the buyout is completed. 

Jászai noted that although Mátrai Erőmű was loss-making last year, it booked combined profit of more than HUF 52 billion in the previous five years.  The consolidation of Mátrai Erőmű will raise Opusʼs group-level financial indicators by a "significant degree," according to his statement.  

The minority owner of Mátrai Erőmű is the state-owned Hungarian Electricity Works (MVM), which has retained a 26.15% stake in the power plant company.

Opus announced in February a number of planned in-kind contributions of stakes in companies owned by Mészáros into Opus in exchange for newly issued shares in the holding. One of these transactions is the in-kind contribution of a 55.05% stake in Status Power Invest, conferring ownership of a 20% stake in Mátrai Erőmű.

As a result of this transaction, paired with the recent capital raise at Opus, Opusʼs indirect stake in Mátrai Erőmű will rise to 34% when it acquires the first part of EPHʼs stake in the JV, and to 40% on acquiring the remainder, noted vg.hu.

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