Lithuania’s govt wraps up talks with NDX Energija

December 17, 2007 at 11:43 pm Leave a comment

Ignalina N-PlantAs the BNS reported more than a fortnight long talks between Lithuania’s government and private equity company NDX Energija have been wrapped up. However, the results are not being announced for the time being.T

he lawyers would review the texts of documents, and the negotiators would hold another meeting on Monday to harmonize those documents officially, Vytas Navickas, economy minister and head of governmental group of negotiators, told the reporters on Sunday night after the completion of the round of talks that lasted for almost 12 hours. On Saturday the groups of negotiators worked about 14 hours. The decision would probably be adopted on Wednesday, Navickas added.

Unofficial BNS sources reported that the governmental task group would put forward two alternatives – either to establish the national investment company on the framework of state-run power utility Lietuvos Energija (Lithuanian Energy), as provided for in the new nuclear power plant legislation, or to set up a new parent company that would require respective amendments to the legislation to be passed.

With the first option chosen, NDX Energija would not participate in the setting up of the national investment company, often dubbed “the three-headed dragon”.In the other case the company would get more than one-third in the new company that would be set up via the merger of Lietuvos Energija, the state-run power grid operator Rytu Skirstomieji Tinklai (RST) and the other power grid operator VST, which is controlled by NDX Energija.“Both parties to negotiations have discussed all issues, no issues for consideration remain – the discussions are closed. 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,” Navickas told the reporters.

“The discussions of all issues have been wrapped up. I think it is important,” Darius Nedzinskas, NDX Energija CEO, said after the talks.He reminded, however, that the talks had not been closed pending the final decision of the government.

The talks between the government and NDX Energija on the setting up of national investment company were launched on Nov. 30 after two delays.

The government first proposed to establish the national investment company based on the model set forth in the nuclear power plant legislation adopted by the parliament, i.e. on the framework of Lietuvos Energija via the raising of its authorized capital with the state-owned shares of RST and the shares of VST controlled by NDX Energija.

Meanwhile, NDX Energija proposed to set up the national investor via the establishment of a new parent company, which would enable the new entity to avoid the effects of contracts concluded by Lietuvos Energija with Russia’s energy giant Inter RAO UES.

Navickas said last week that the government would consider the opinion of NDX Energija, i.e. to establish a parent company, separately should the position of NDX Energija remain unchanged during the weekend.

He admitted then that the option proposed by NDX Energija could be implemented much faster and was better in legal terms since it would offer a chance to avoid potential conflicts with the shareholders and creditors of Lietuvos Energija who might challenge the company’s evaluation and its reorganization.

However, that option would not be advantageous in economic terms as the new company would lose its financial history, which would aggravate its talks with banks, Navickas said.

The representatives of NDX Energija earlier expected their share in the soon-to-be-established national investment company to reach at least 40 percent.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.

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Entry filed under: Baltic States, Economics, Energy, Estonia, Latvia, Lithuania, Northern Europe.

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