PannErgy to post financial profit of more than HUF 1.5bn due to Pannunion sale

Hungarian geothermal-energy company PannErgy expects to register more than HUF 1.5bn of IFRS consolidated financial profit as a result of the sale of its plastics unit Pannunion to Pannunity, the company said on the Budapest Stock Exchange website on Wednesday.

PannErgy said it will receive the first HUF 4.76bn installment on the sale of its 95.22%n holding in Pannunion on Wednesday October 19 and will receive a further almost HUF 270m on earlier loans to the unit, also payable on October 19.

PannErgy will receive the remaining part of the purchase price, expected to amount to almost HUF 637m, in January 2012 at the latest.

The transaction received necessary competition office approvals, including that of Hungary's competition office GVH by October 13.

The exact size of the second installment and, as a result, of the financial profit to be posted will be finalized only during third-quarter consolidation the earliest, PannErgy said, adding that it expects the final price to equal the agreed maximum which is the HUF 210.32 per share price offered to every Pannunion shareholder in a public bid.

PannErgy said most of the proceeds from the transaction will directly finance its geothermal strategy launched five years earlier. PannErgy added it sold the last big assets unrelated to its geothermal activities in the transaction.

Luxembourg-registered special-purchase vehicle Pannunity is an associated company of Sun Capital Partners.

Pannunion posted net income of HUF 540m on sales of 8.17bn in the first half of 2011, unaudited IFRS consolidated figures show. Net assets stood at HUF 4.29bn at the end of June 2011.