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MVM to purchase Budapest stake in Főgáz

Energy Trade

The state-owned Hungarian Electricity Works (MVM) will purchase the Budapest Municipal Council’s 50%-plus-one-share stake in regional gas-distributor Főgáz by July 31, a government resolution published in the Tuesday issue of official gazette Magyar Közlöny shows. 

MVM signed a contract on December 19, 2013 to purchase Germany-based RWE Gas International’s 49.83% stake in Főgáz for HUF 41 billion. The transaction could be closed in the first half of this year after approvals from the authorities and consent from the co-owner Budapest City Council, the signatories said in December.

Főgáz has 820,000 retail and corporate clients. HVG online reported two weeks ago, citing sources close to the ruling Fidesz party, that the government planned to nationalize both Főgáz and the capital’s water works company, Fővárosi Vízművek, and turn them into non-profits.

With the restructuring of the regulatory environment and MVM Group entering the natural gas market in 2011, it has become possible to make access to western gas supply capacities transparent, allowing domestic gas prices to start falling from their earlier, “artificially high level,” explained a statement from MVM in January.

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