Elmű, Émász call EGM to decide on transfers of activities

Banking

Electricity distributors Elmű Nyrt and Émász Nyrt, both owned by German utilities company RWE-EnBW, have called an EGM to convene on September 28 to approve the transfer of business activities.

Industry insiders say the transfer is probably related to the separation of the two companies' network operation and delivery activities from their electricity distributor activities, as required by an EU directive. EU rules requiring electricity companies to create independent companies for the two activities are intended to make access to power networks more transparent. The deadline for meeting the requirement is July 1, 2007, when the EU electricity market is due to be fully deregulated.
Because the measure is being made to meet legal requirements, the transfer of assets involved will not be taxed. However, experts note that Hungary's so-called solidarity tax, a 4% tax on profits, to be introduced from September 1, could apply to the transfer.
The separation will require the approval of the state, which holds a golden share in both companies.

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