State, NDX Energija start talks

  • 2007-11-21
  • From wire reports
VILNIUS - The government and a privately owned energy firm have launched negotiations on how to establish a national energy utility that would be entrusted to help finance and operate Lithuania's new nuclear power plant.
The talks between the Economy Ministry and NDX Energija, which began Nov. 20, will be closely watched given the widespread criticism of how NDX Energija acquired VST, the western half of Lithuania's energy grid, in 2003.

The two sides will try to determine how to appraise NDX Energija's assets vis-a-vis the two state-owned companies 's RST and Lietuvos Energija 's it will merge with to form a national energy company.
It was unclear how long the talks with NDX Energija might last.
NDX was founded and is owned by the owners of VP Market, which owns the largest chain of grocery stores 's the Maxima chain 's in the Baltics.

Previously it was reported that the state might acquire 61 percent in the unnamed power company, while NDX Energija would receive a 39 percent interest.
An independent auditor has appraised all three companies to be merged, and Economy Minister Vytas Navickas told reporters on Nov. 16 that a task group would review the estimations.
"We have valuable information from the adviser bank and the Sorainen law office, and this data will be of great use for us during the negotiations," Navickas said.
"We have already worked out the arguments that could be used in order to boost the state's share in the national investment company," he added, refusing to give details.
Navickas previously said that he had arguments that would validate the state's claims to a larger share of the national investment company. Specifically, he mentioned the value of the Kaunas hydropower plant and the Kruonis hydroelectric plant, both of which are expected to boost cash flows in the future after the Ignalina nuclear reactor shuts down in slightly over two years.

If based on the evaluation of assets of Lietuvos Energija, RST and VST, which was carried out by KPMG Baltics, the state's stake in the national power company might be 64 percent, while NDX Energija would get approximately 35 percent, according to unofficial sources.
Sources also said that the latest KPMG evaluation put the value of VST at 2.9 billion litas (840.5 million euros), RST at approximately 2.7 billion litas and Lietuvos Energija at 2.5 billion litas.
The National Audit Office will provide its conclusions on the evaluation of the three energy companies.