German utility E.ON said that it has completed the sale of its Bulgarian subsidiary to private Czech energy group Energo-Pro for an undisclosed amount.
The deal, announced in December 2011, was approved by Bulgarian regulators a month later, but was delayed by financing issues, reports in Bulgarian media said.
E.ON agreed to lower the initially-agreed price of 133 million euro by about 30 per cent, Bulgarian newspaper Capital said, quoting sources familiar with the transaction. Even at the initial price, E.ON sold its Bulgarian unit for less than what it paid in 2004 to buy 67 per cent in two of Bulgaria’s seven regional power distribution companies – 140.7 million euro.
The German utility merged the two companies Varna and Gorna Oryahovitsa, which service northern and northeastern Bulgaria, to form E.ON Bulgaria. In 2010, E.ON decided to sell its Bulgarian business after reconsidering its global strategy and deciding to focus on high growth potential markets in South America and Russia.
In recent years, the net profit of E.ON Bulgaria has also been constantly declining – from 35 million leva in 2008 to 500 000 leva in 2010.
Energo-Pro thus becomes the second Czech company to buy into Bulgaria’s electricity distribution industry; state-owned CEZ entered the market in 2004, at the same time with E.ON, acquiring three power distribution companies servicing western Bulgaria, including capital city Sofia.
E.ON Bulgaria, based in Varna, operates a power grid of about 42 000 km and delivered around 5.5 billion kWh of electricity in 2011.