Lithuania: KPMG and HSBC win Tender

Date: 01-10-2007
Source: Baltic Business Weekly

Lithuania has chosen the international business consultancy KPMG Baltics to value the shares in the country`s three largest energy companies and selected the London office of the international investment bank HSBC to advise the government in negotiations with NDX Energija, the owner of the distribution grid operator VST.

A commission headed by Economy Ministry Undersecretary Gediminas Rainys on Sept. 25 named these companies as the winners of a public tender.

Rainys said that the government expects to sign agreements with the winners in the coming days.

The valuators of the shares will be paid around a billion euros from the Privatization Fund.

Fifteen international companies were invited to participate in the public tender, which was announced in late August.

KPMG Baltics is to complete the valuation of the shares in the power transmission company Lietuvos Energija ( Lithuanian Energy) and the two power grid operators, Rytu Skirstomieji Tinklai (RST) and VST, by Oct. 26, Rainys said.

It will take another two weeks or so for HSBC to present its opinion on the valuation report and advise the government in its talks with NDX Energija, so the final estimate of the value of the shares should be available in mid-November, the official said.

The government is in the process of merging the three energy companies to form a large utility company that will act as a "national investor" in the planned construction of a new nuclear power plant and other key energy projects worth tens of billions of litas.

"I believe that the process should be completed this year. We will most probably have to apply to the European Commission`s Competition Directorate for approval," Rainys said.

Last week the energy firms and the government applied to the Lithuanian Competition Council for permission to create the national investor company.

It is planned that Lietuvos Energija will take over shares in RST and VST through a share capital increase. Lietuvos Energija and RST are controlled by the state, while VST is now owned by NDX Energija.

Lithuania hopes to build the new nuclear power facility by 2015 together with Latvia, Estonia and Poland. It would replace the Soviet- era Ignalina Nuclear Power Plant, which is scheduled to be closed in 2009 due to safety concerns.

Other major energy projects include building a grid connection with Poland and an underwater power link with Sweden.