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23 December 2004 - Enel SpA is ready to buy a five per cent stake in Electricité de France (EDF) as soon as the French government privatizes the company.
The deal would enable Enel to buy energy on the French market at more friendly prices. In recent weeks price per MWh has risen from €6.7 to €42 in almost half of Enel's French market contracts.
The sale of EDF is expected in the second half of 2005 after the similar sales of Areva and Gaz de France. The government is hoping to see a return of at least €9bn from the 30 per cent stake it is making available, which could see Enel having to pay €1.5bn for the share it desires.
The news of Enel's intent to purchase a five per cent stake in EDF comes a day after it concluded its exit from the water business by selling 100 per cent of the share capital of Enel Hydro SpA to Compagnie Généeral des Eaux S.A, the water company of Veolia Environnement group. The sale includes Enel's water initiatives in Calabria and the province of Latina, and also, 20 per cent of Idrosicilia SpA, which operates large scale water transportation activities in Sicily.
The total transaction is approximately €36m and it should be concluded in the first quarter of 2005. Enel and Veolia have included an option for the sale of Enel's remaining 40 per cent stake in Idrosicilia. These moves by Enel are further steps in their intent to focus on a core business of electricity and gas.
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