Hungary’s government has decided to partially privatize power-system operator Mavir as part of its the New Ownership Program, a scheme that allows private individuals to purchase shares in state-owned companies, government Spokeswoman Bernadett Budai said on Friday.
The government aims to separate grid-operating activities from the Hungarian Electricity Works (MVM) in order to stimulate competition and reduce retail prices, Ms Budai said. Plans are to reduce MVM’s stake to below 50%-plus-one-vote, but to no less than 25%-plus-one-vote, Ms Budai said. The government will gradually sell its stake in Mavir through the National Asset Management Company until March 31, 2010. Selling the company all at once would likely depress the share price significantly, Ms Budai added.
By the end of this year, legislation will be modified to make sure that nobody gains an unfair advantage in control over Mavir. The government announced the New Ownership Program in March. It said that in the first phase, State Motorway Management Company (AAK) and a property portfolio compiled by the National Asset Management Company would be considered for inclusion in the program.
For purchases of up to Ft 250,000 each, the government plans to offer small investors who make a 10% down-payment an interest-free, three-year loan to be repaid in installments. It will also guarantee repurchase of the shares at issue price within 18 months and shares held for five years will be exempt from the 20% capital gains tax, Ms. Budai added.
Other companies being considered for the program include national lottery company Szerencsejéték, Hungary’s regional water companies and postal company Magyar Posta. (MTI-Econews)