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State-owned electricity works MVM to get HUF 50 bln capital raise

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Photo by AB Sydney Electrical

State-owned Hungarian Electricity Works (MVM) is to receive a HUF 50 bln capital raise next year, the 2015 budget bill before parliament revealed, according to Hungarian news agency MTI. Last year, MVM received a HUF 71 bln from the budget to support the purchase of the German E.On's two Hungarian gas businesses. 

The energy group will receive the additional capital from next year's central budget to carry out strategic tasks, the explanation of the bill says, noting that as before, MVM's operations are not expected to make a capital injection necessary.

Because of the capital needs, the government does not expect MVM to pay a dividend to budget next year, the budget bill explained. MVM paid a dividend of HUF 10 bln both in 2012 and on 2013. The capital increase will allow MVM to provide its share in the initial capital of the South Stream project, according to the bill. The fresh capital will also finance a 450MHz of MVM Net, the group's telecom unit.

A representative for state-owned Hungarian electricity and energy group MVM told MTI on November 7 it was ready to take over the role of multinational companies withdrawing from the region, while companies in the energy sector are watching anxiously as the state prepares to move deeper into the utilities business.

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