Slovakia Interested in Bigger Stake in Enel Slovak Unit

By Sean Carney

The Slovak state is seeking a majority stake in the country's dominant electricity company Slovenske Elektrarne AS, currently majority-owned by Italy's Enel Spa (ENEL.MI), but the price must be right and, in the meantime, the Italian energy firm is responsible for completing the construction of two nuclear reactors, Slovakia's prime minister said Wednesday.

"Everything is a question of price," Robert Fico said after meeting with Enel Chief Executive Francesco Starace in Bratislava.

Enel bought a 66% stake in Slovenske from Slovakia in 2006 for 840 million euros ($916.9 million) and is in the midst of building two additional reactors at the Mochovce nuclear power plant in the country.

However, as with atomic power plant construction elsewhere, there have been numerous delays, design changes and cost overruns.

Mr. Fico said he is demanding precise price and costs outlays, dates, conditions and total certainty on the remaining construction of two nuclear reactors. The first unit should be put into operation in 2017.

Mr. Fico said it would be advantageous to get a majority in Slovenske Elektrarne but it isn't necessary for the state to get 100%.

Enel said last year that it was considering selling Slovenske to help it raise roughly EUR4 billion to pay down debt. However the Italian company has floated a block of shares in its Spanish unit Endesa SA (ELE.MC) and so no longer urgently needs to sell its Slovak portfolio, company officials earlier said.

Nevertheless, Enel has set May 9 as the latest deadline for binding bids for its 66% stake in Slovenske. Last week, Enel officials said they hadn't received any bids yet.

State-run power companies in the Czech Republic and Hungary, as well as investors from Finland and China, had expressed preliminary interest in Enel's stake in Slovenske, but potential bidders have noted that the unfinished nuclear units posed major risks to any possible bids.

Mr. Fico says he respects Enel's wish to possibly sell down its stake in SE, though he said it doesn't match the Slovak government's strategic goal.

Constructing two nuclear reactors is a key project for the country and Enel bears responsibility to finish the construction regardless of its divestment plans, Mr. Fico said.

If Enel decides to sell part or all of its stake in Slovenske, it could further draw out the construction of the reactors, raise costs and put the project into question; as such, it is now the Slovak state's priority to take a majority stake in the utility, Mr. Fico said.

Write to Sean Carney at [e-mail]

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