EC Warns Romanian Prv Auth On Distrigaz, Electrica Sale Terms - Sources

This issue could require the decrease of state interest below 25% or the amendment of the constitutive acts.

According to the European Commission Treaty, the acquisition of majority stakes in national companies, as a direct investment, by investors settled in non-EU countries, and their full enforcement of the voting rights, is a form of capital-circulation.

Germany’s E.ON Ruhrgas and French Gaz de France bought gas distributors Distrigaz Nord and Distrigaz Sud, respectively, in 2005, while Italy’s Enel bought electricity distributors Electrica Dobrogea and Electrica Banat. In all these cases, the state sold a 51% stake and settled various terms in the sale contract.

Thus, four years from the sale, Enel still cannot sell any share in Electrica Dobrogea or Electrica Banat without Romanian state written agreement as long as it owns at least 25%, or take a decision on the split up of companies. It could neither shift their headquarters abroad or make various mergers that could change the stockholders’ structure.

E.ON Ruhrgas and Gaz de France are entitled to designate all the administrators of Distrigaz Nord, and Distrigaz Sud, respectively, provided the state owns less than 10% in the share capital of each company. E.ON Ruhrgas undertake by contract not to sell over 5% in Distrigaz Nord’s main assets for a five-year period.

The European Commission asked the Romanian state to corroborate that the terms of the sale contract or of the constitutive acts will automatically cease after the four-year deadline for Electrica Dobrogea and Electrica Banat and after the five-year deadline in the case of Distrigaz Sud and Distrigaz Nord. The Romanian state must equally confirm it would not settle equivalent provisions by other normative acts.

AVAS response paper to the European commission, which MEDIAFAX obtained, shows the constitutive acts of the respective companies mirror the contract terms.

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