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5 November, 2003 Italy's biggest power company, Enel SpA, will bid for a controlling stake in seven state electricity distributors in Bulgaria, an industry source said Wednesday.
The move is part of Enel's strategy to expand into Eastern Europe to counteract its shrinking domestic market share. An Enel spokesman declined to comment.
Separately, Europe's largest listed utility could also join forces with AES Corp. (AES), a US energy company that is constructing a 650 MW lignite-fired unit at the thermal power plant Maritza Iztok 1 also in Bulgaria, the source said, speaking one day after Enel Chairman Piero Gnudi made a business trip to Sofia.
The Bulgarian government has put on the block 67 per cent stakes in each of the seven utilities, which have been grouped into three pools, the person said. The smaller group has around 1 million clients and the bigger pool has 1.8 million clients, he added without providing price information.
Each bidder can only buy one of the three pools, but Enel will submit a bid for each one, the person said.
Information memoranda will be sent to the bidders by Dec. 23. The deadline for non-binding bids is Jan. 30.
In the electricity generation business, Enel's talks with AES could lead to an alliance, the source said. However, Enel wants the American company to buy out offshore company 3C, a minority shareholder in the Maritza Iztok 1 project with a 12 per cent stake, as a precondition.
"That's part of Enel's policy - avoiding non-industrial minority shareholders," the person said.
Enel is already an industry player in the Bulgarian market, which accounts for 45 per cent of electricity exports in the Balkans, serving the power needs of neighboring Turkey, Greece, Serbia, Kosovo, Albania, Macedonia and Romania.
The state-controlled power giant in March bought control of a joint venture between US power company Entergy Corp. (ETR) and Bulgarian state power company NEK operating the 840 MW Maritza East III power plant.
Enel Chief Executive Paolo Scaroni, who is refocussing the company on its core electricity and gas business, said the EUR140 million Bulgarian JV deal was instrumental to export electricity to Turkey, Greece and Italy.
Enel last year completed a EUR339 million sub-sea cable which connects Greece to Italy's grid. The cable provides a capacity of 500 MW in both directions.
Analysts said Enel can exploit low-cost electricity production in Bulgaria and profit by the Italian market, which has Europe's highest electricity prices.
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