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State, private energy firm keeping mum after finishing merger talks

  • 2007-12-19
  • By TBT staff
VILNIUS - A ministry and a private energy firm announced on Dec. 17 that they have concluded talks on how to merge their respective assets and form a national corporation that will help finance and operate a new atomic power plant.
However, both the Economy Ministry and the private firm, NDX Energija, refused to comment on the talks, which began some two weeks ago and ended late on Dec. 16 after a 12-hour session.
Economy Minister Vytas Navickas said that the final agreement, which the ministry was to submit to the government for approval, would likely be reached on Dec. 18.
"Both parties to the negotiations have discussed all the issues. No issues for consideration remain 's the discussions are closed," Navickas told reporters.

"We have coordinated the provisions for the functioning of the national investment company, and that company could work successfully on that basis. There will be a common position," he said.
Darius Nedzinskas, CEO of NDX Energija, said only that the negotiations had been finalized but the government's approval was still necessary.
According to unconfirmed reports, the government will receive two proposals. In line with the first, a national investment company based on the state-run power utility Lietuvos Energija (Lithuanian Energy) would be set up. The second is to charter a new umbrella company that would own stakes in Lithuanian Energy and two companies 'sone of which is NDX Energija 's that operate the nation's electricity grid.
Under the first option, NDX Energija would not participate due to differences over the vulnerability and effectiveness of such an arrangement. If the second alternative is chosen, however, the firm would receive at least a one-third stake in the umbrella company.

NDX Energija, which is controlled by the owners of VP Market, the largest retail grocer in the Baltics, owns and operates VST, the western half of Lithuania's electricity grid. The government has 100 percent ownership in RST, the eastern half of the nation's grid.
NDX Energija has been bitterly opposed to merging VST, RST and Lithuanian Energy into the last's structure given Lithuanian Energy's contracts with and obligations to Russia's RAO UES.
Navickas has said that the government would consider this opinion and thus the merits of establishing a parent company.

He also admitted that NDX Energija's option could be implemented faster and was better in legal terms since it would offer a chance to avoid potential conflicts with shareholders and creditors of Lithuanian Energy, who might challenge the company's appraisal.
However, a new umbrella company would not have a financial history and thus face more challenges trying to raise capital via banks, the minister has said.
According to initial schedules, the talks were supposed to be closed by Nov. 16 and the national investment company was to be established by Jan. 1.

The representatives of NDX Energija earlier expected their share in the national investment company to be near 40 percent.