BNP-PARIBAS TO SELL ELECTRICITY DISTRIBUTION COMPANIES WITHIN 12 MONTHS
The Energy Ministry has prepared a list of about 65 firms, investment companies and banks, to be invited for participation in the tender for privatisation of the seven electricity distribution utilities. The Russian RAO, Germany's E.ON and RWE, the French Electricite de France (EdF), are among the companies on the list. After a one-month delay, on Wednesday (September 18) two contracts were signed with the investment bank BNP-Paribas, which had won the contest for a consultant in the deal. Both contracts have one-year validity. One of them, worth EUR950,000 is for the overall activities of the bank's consulting team. The money comes from the European Bank for Reconstruction and Development (EBRD) under the PHARE Programme and the Bulgarian Energy Ministry is a party of the contract. The other contract, signed by the Privatisation Agency (PA), is for an additional success fee. Its exact size has not been announced, but according to pundits, the usual remuneration of the mediator is between 0.5% and 1.5% of the final selling price.Our team begins work on the very day of signing the contracts, Erve Esquette, head of BNP-Paribas consulting team on public services and privatisation, said. By October 15 the bank's experts should draft the preliminary report on the current state of the seven electricity distribution utilities and the strategy for their sale. In addition, they should arrange the companies in three pools, each of them including 1,000,000 subscribers and ensuring a balance between industrial and household consumers. Both state officials and experts from private consulting companies are unanimous that this sale will be the largest privatisation deal in Bulgaria. Expected proceeds are between EUR350MN and EUR800MN.