Brazauskas: RST sell-off put on hold

  • 2005-08-10
  • From wire reports
VILNIUS - Prime Minister Algirdas Brazauskas said the government has no intentions to privatize Rytu Skirstomieji Tinklai, operator of the eastern half of the nation's power grid, despite widespread speculation to the contrary.

"At least this is my opinion. The government has not considered this issue, and I do not see any reason to initiate the discussions," Brazauskas said in an interview to the Verslo Zinios business daily.

The state owns 71.35 percent of RST and sold its controlling stake over the western half of the grid last year, fueling rumors that it would complete privatization of the entire electricity distribution network.

The current situation, with half of the country's power distribution in private hands and the other controlled by the state, was appropriate, the prime minister noted. He added that there were no reasons to push for any changes.

"Distribution grids have not been privatized in the majority of old European Union member states. And I do not see any reasons for us to rush. We have to work and see what is the best for consumers, what the changes in the pricing policy will be," the Cabinet leader said.

The company posted "paper" losses of 84 million litas (24.3 million euros) due to the revaluation of long-term assets in 2004. For the first half of 2005 the company reported 11.7 million litas in pretax earnings under the International Accounting Standards, a decline of 9.3 percent versus the year-earlier figure.

RST shares are quoted on the Current List of the VSE. The state owns 71.35 percent of the stock, while Germany's E.ON Ruhrgas holds a 20.28 percent stake in the company, which has an authorized capital of 492.4 million litas.

The power distributor has targeted an 11 percent growth in revenues to 823.2 million litas this year, up from 741.6 million litas in 2004, as electricity sales are expected to rise 2.3 percent to 3.6 billion kilowatt-hours.