State to acquire Émász, Elmű retail businesses

Recycling

Hungaryʼs First National Utilities Company (ENKSZ), recently established by the state to act as an efficient, predictable and cheap utilities provider, could take over the retail business of regional electricity distributors Elmű and Émász under a declaration of intent signed by the government and German owner RWE yesterday.

The state-owned Hungarian Development Bank (MFB) could acquire 100% of Elműʼs and Émászʼs "universal service provider" unit by January 2016, thus launching the establishment of the national utilities service on the electricity market "under the professional direction of ENKSZ", the Prime Ministerʼs Office said in a statement.

ENKSZ is looking to buy 100% of Elmű-Émász Ügyfélszolgálati – provider of customer service in the universal service area of Budapest and northern Hungary – in two steps, by January 1, 2017, the PMʼs office added.

Universal service providers supply gas using a price structure and level controlled by the state.

In a separate statement released at the same time, ENKSZ said it could start taking over Émász and Elmű customers "within a few months".

ENKSZ launched services on the gas market earlier in May, using Főgáz, also a former unit of RWE, as a bridgehead.

The state-owned Hungarian Development Bank (MFB) also wants to acquire 49% stakes in Elmű and Émász, the PMʼs Office said.

The declaration of intent also paves the way for the state-owned Hungarian Electricity Works (MVM) to raise its stake in the operator of power plant Mátrai Erőmű from 26.15% to 49%.

Mátrai Erőmű is Hungaryʼs largest lignite-fueled power plant with a built-in capacity of 950MW. It produces 15% of the countryʼs energy output and employs 2,100 people.

RWE owns 50.9% of the plant. German peer ENBW holds 21.7%.

The declaration of intent was signed by cabinet chief János Lázár, RWE-East chairman Martin Herrmann and RWE Hungária chairman Marie-Theres Thiell.

"The joint aim of the parties is to contribute, through their cooperation, to the security of consumer electricity supply in Hungary, to keeping energy prices at a favorable level, and to the sustainable development of the countryʼs economy and energy market," the PMʼs Office said.

The government and RWE agreed to further talks on the specifics of the deals after the signing of the declaration of intent.

The government and the company plan on signing a strategic cooperation agreement in the future.

Elmű and Émász both confirmed the signing of the agreement in separate statements published on the website of the Budapest Stock Exchange late Thursday.

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