Trend for privatising the electricity sector continues across Central Europe

Czech Republic
Following the approval by the Government of Romania of the privatisation strategy for Electricity Distribution and Supply Companies "Electrica Banat" S.A. and "Electrica Dobrogea" S.A., two of the eight regional subsidiaries of Electrica S.A., an announcement of their sale has now been made. These will be the first two electricity companies to be privatised in Romania and so represent the first steps of the privatisation of that country's electricity industry. Other companies are expected to follow.

This follows the trend for privatisations in the electricity industry set by other Central European countries; Hungary led the way in 1995 with Slovakia being a more recent example in 2002.

The privatisation will be to strategic investors by way of sales of existing shares representing 24.62 per cent and the subscription of new shares representing 35 per cent of the increased share capital giving investors 51 per cent in each case. An additional 10 per cent will be sold to associations of employees.

The announcement contained details of the proposed timetable for the privatisation with expression of interest from interested parties being requested by 28th February 2003 with results of the pre-qualification process notified by 28th March 2003. This will be followed by a competitive tender stage consisting of the submission of preliminary non-binding bids followed by negotiations and submission and selection of final binding bids followed by negotiations with the selected bidder.

For more information on this and other related topics please contact:

Stephen Forster
Corporate Partner, London
Tel: +44 (0) 20 7367 3698
E-mail: stephen.forster@cms-cmck.com

Robert Lane
Electricity Partner, London
Tel: +44 (0) 20 7367 2021
E-mail: robert.lane@cms-cmck.com

Helen Rodwell
Partner, Prague
Tel: +420 2 2109 8818
E-mail: helen.rodwell@cms-cmck.com

Ana Radnev
Associate Lawyer, Bucharest
Tel: +40 21 231 64 74
E-mail: ana.radnev@cms-cmck.com