Montenegro pays first EUR 68.9 million tranche to A2A

Podgorica, Montenegro (15 May 2018) -- Government of Montenegro paid the first tranche of EUR 68.9 million to the Italian company A2A, thus acquiring 17.252.885 shares in the Electric Power Industry of Montenegro (EPCG).

With 57.01% ownership in the EPCG, the State reaches 70.16% and virtually returns its ownership stake in the company to the level before the partial privatisation and recapitalisation in 2009.

Earlier today, the Finance Ministry, in line with the Law on Budget Restructuring, made payment of the first tranche, for which the deadline, under the Contract on Put Option Execution, expires on 16 May.

The basic version of the contract stipulates that the second acquisition of shares by the State will be made in May 2019 in the amount of EUR 39.9 million for 8.826.438 shares. The remaining shares, through two tranches in July 2018 and July 2019, will be acquired by the EPCG through the mechanism for acquiring its own shares, in compliance with the Law on Business Companies.

The total amount for which the Government will purchase shares from the A2A has been reduced from EUR 250 million to EUR 230.6 million at a discount rate that corresponds to the country's borrowing parameters with the corresponding maturity.

We reiterate that, under the Shareholders' Agreement between Montenegro and A2A of 2016, the two parties, as shareholders of the EPCG, regulated issues related to the management of the company, as well as the terms of the termination of the strategic partnership. By amending the agreement on 29 March 2017, the deadline for A2A management’s right to the company was extended until June 2017. Given that upon the expiration of the deadline, conditions for further cooperation on the same principles were not recognised, the Government of Montenegro did not accept A2A's initiative to extend the term of validity of A2A's management rights to the EPCG, and on 1 July 2017, the strategic partner initiated the procedure for termination of the partnership by the notification of activating the Put option.

MINISTRY OF ECONOMY
MINISTRY OF FINANCE