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Enel purchases stake in Electrica Muntenia Sud

Enel has signed a contract on the purchase of a 67.5% stake in Romanian national electric energy supplier Electrica Muntenia Sud.

Italian energy concern Enel has signed a purchase contract in Bucharest on the purchase of a 67.5% stake in Romanian national electric energy supplier Electrica Muntenia Sud (EMS), Romanian news agency Rompres reports. Total transaction value will amount to €820 million ($1094,2 million). The Italians will purchase 50% of the stake in EMS in the first stage for €395 million to increase their stake for additional €425 million through the increase of the Romanian company's fundamental capital, to a total of 67.5%. The capital increase will be used for investments, which will reach the total value of a billion euro in the next 15 years. Enel won at the public tender in the summer of 2006 but the realization of this transaction was late because of charges against high Romanian officials in relation to corruption in privatization.

EMS is the largest branch of the Romanian national energy concern Electrica and it supplies the capital of Romania, Bucharest, with electric energy, among other cities. Enel does not plan any other new acquisitions in Romania, Enel Romania head Matteo Codazzi announced upon signing the contract in Bucharest. „We have reached the optimum volume on the Romanian market with this acquisition” Codazzi concluded. Enel has already purchased a 51% stake in Romanian electric energy suppliers Electrica Banat and Electrica Dobroge in June 2004 for a total of €127.4 million ($170 million). These branches employ 3,600 workers and supply electricity to 1.4 million clients. The Italians doubled their presence in Romania with the purchase of this stake in EMS.

According to Romanian Finance Minister Varujan Vosganian, electric energy suppliers in Romania will invest around €600 million ($800 million) only in the current year in the modernization of the distributional network. In the period from 2008 until 2012, investment value should amount to two to three billion euro, Vosganian evaluates. (