The joint stock company Elektromreza Srbija (EMS), according to the decision of the Government of Serbia, bought an additional five percent of the shares of the Transmission System Operator of Montenegro for 6.9 million euros on the Montenegro Stock Exchange yesterday, EMS officially announced today.
EMS thus became the owner of a total of 15 percent of the shares of the Montenegrin Electricity Transmission System (CGES).
7,288,197 shares were purchased at an average price of 0.9493 euros per share for which 6,918,738 euros were paid. The shares were bought from small shareholders.
EMS entered the ownership structure of CGES in December 2015 by buying 10.0141 percent of shares.
“Purchase of additional shares of the company Crnogorski elektroprenosni sistem AD in economic and business terms, it represents a justified investment in a successful company that performs the same activities as our company, and whose revenues, profits and assets show a tendency to grow,” EMS said in a statement.
As stated, EMS realizes a proportional right to dividend, from which financial profit is expected. EMS is intensively conducting investment activities on the territory of Serbia and at the same time working on strengthening its transmission interconnection capacities.
“On the territory of Serbia, our company is actively building a strategically important project, the Trans-Balkan Electricity Transmission Corridor, and a maritime cable has been laid and put into operation between Montenegro and Italy, which is an integral part of that corridor. The purchase of an additional package of shares is part of EMS’s strategic commitment to actively participate in strengthening the pan-European connectivity of the Eastern and Western bloc countries, as well as in creating and strengthening the base for the development of the European electricity market,” EMS said.
In that way, EMS strengthens its position as a regional leader, it is stated in the announcement.
Violent reactions in Montenegro
According to the Montenegrin portal CDM, Montenegrin citizens learned from the Serbian media that the Electric Network of Serbia (EMS) bought an additional 5% of the shares of the Montenegrin Electricity Transmission System (CGES) for almost 7 million euros. Montenegrin journalists are wondering whether the Serbian company now has a total of 15% ownership in CGES and whether this is another “secret but organized” action.
They also remind that in December 2015, EMS bought a little more than ten percent of CGES shares worth 13.9 million euros on the stock exchange.
“Serbian media, reporting on that trade, already then pointed out that their economists assess that this transaction is important both for the company, but also for that country, which aspires to strengthen its leading energy position in the Balkans,” the portal said.
It is known that, in addition to EPCG, CGES is one of the most valuable and important Montenegrin companies, especially because of its partnership with the Italian Terno, thanks to whose cooperation the most important project in this part of Europe in the field of electricity interconnection was realized. Submarine electricity interconnection between Montenegro and Italy is one of the largest investments in electricity transmission infrastructure in Europe. Financial value, technical parameters, but also the fact that it is a project included in the official lists of projects of importance for the European Union and projects of importance for Energy community, they talk about the importance that transcends Montenegrin borders. The intention of EMS to buy the property in this company has so far been possible only through the stock exchange, and the new stock trade shows a desire not to stop only at a minority stake, the text estimates.
EPS has been interested for a long time
“Serbia’s intentions to buy the electricity system in Montenegro are not new. The President of Serbia, Aleksandar Vucic, has long been showing interest in this important part of the state economy, but, at that time, according to his confession, there was no political will for that. Vucic pointed out a little over a year ago: “The state does not intend to sell the Electric Power Industry of Serbia (EPS), but wants to buy electric power companies from the surrounding area and to expand and strengthen its company.” He then noted that it is also a political issue, so, “although we have money, some in the area do not want to sell their power companies to us… We are ready to buy power companies, we want to expand and strengthen EPS, to be the largest company in the Balkans,” it is added in the text of the CDM portal.
That Serbia now has a much better chance of managing Montenegro’s electricity systems is also confirmed by media reports that Milutin Djukanovic, a member of the Democratic Front there, is the most serious candidate for the new director of Elektroprivreda Crne Gore. This information was confirmed to Dnevne novine by several sources close to the top of the ruling coalition in Montenegro. The paper states that “the first move of the new leadership led by Djukanovic, as their sources claim, will be the beginning of the realization of the project for the construction of HPP ‘Komarnica’, which will be left to the Electric Power Industry of Serbia.”
EPS has long been interested in building a peak power plant on Komarnica, and the new administration will refer to the contract from the 1980s, which “gives Serbia the right to build Komarnica on the basis of research funding,” Dnevne novine wrote.
It is known that the energy independence of every country is one of the most important preconditions for its functioning. In the previous privatizations of electric power companies, the state has always remained the majority owner of shares.
“The situation with the sudden shutdown of the Montenegrin national airline, from which Serbian air transport benefited the most, aroused suspicion among a large part of the public that the protection of national interests and companies is not a priority,” the Montenegrin portal concludes, BiF reports.
