Ljubljana, 02 July (STA) - Power utility group Gen has acquired a majority stake in HESS, the company managing the project of five power stations on the lower Sava river, as it bought a 35.6% stake from the fellow state-owned energy company HSE for EUR 96m. The move is expected to facilitate the management of one of the key energy projects in the country.
The contract under which Gen increased its stake in HESS to 51% was signed in Ljubljana on Wednesday by Gen energija, HSE and power utility Savske elektrarne Ljubljana.
EUR 56m was contributed by Gen energija, while the remaining EUR 40m was chipped in by Savske elektrarne Ljubljana, which is fully owned by the Gen group.
HSE and Gen energija said in a joint press release that the GEN group becoming a majority owner of HESS means an "easier and more efficient coordination of the entire hydropower chain on the Sava".
The deal is understood as one of the measures taken by HSE to improve its operations. The country's biggest power utility has found itself in an unenviable financial situation and is taking streamlining and reorganisation measures.
Gen energija has so far owned a combined 15.4% stake in HESS together with its subsidiary Termoelektrarna Brestanica, a thermal power plant operator.
Under the contract, Gen will become owner of a 51% stake in HESS, with Gen energija holding a 33.5% stake, Savske elektrarne Ljubljana a 14.7% stake and Termoelektrarna Brestanica a 2.8% stake.
The HSE group will keep a 49% stake, with the core company holding only a 15.4% stake. Its subsidiaries Dravske elektrarne Maribor and Soške elektrarne Nova Gorica will retain their 30.8% and 2.8%, respectively.
Gen energija said on the occasion that the deal wouild improve the economics of the entire hydropower plant chain, featuring five facilities and increase the share of renewable energy produced by the Gen group.
Gen energija director Martin Novšak explained that the synergy effects would further improve the conditions for reliable and safe operation of the Krško Nuclear Power Plant (NEK), which is co-owned by GEN.
While three power stations in the chain - Boštanj, Arto-Blanca and Krško - have already been launched, the construction of the Brežice plant started in March, and the construction of the last one in the chain, Mokrice, is expected to start at the end of 2015.