The state of Styria has a debt of more than 5 billion euros – and is now increasing its stake in Energie Steiermark by more than half a billion euros from 75 to 100 percent. The aim of the policy is a time-limited total acquisition, the 25 percent that has now been acquired may have to be sold again next year.
The state of Styria currently owns about 75 percent of Styria’s largest energy company, with the remainder owned by Australian financial investor Macquarie. After the investor announced last year that it wanted to sell its shares, the electricity deal was worked on behind closed doors. Because: The country has a right of first refusal and a right of attachment for the minority share of Australians.
And the government coalition ÖVP-SPÖ with governor Christopher Drexler (ÖVP) and his deputy Anton Lang (SPÖ) has now decided to take over Energie Steiermark completely for 525 million euros!
“We deeply believe that we are doing the right thing,” Drexler said Wednesday. “We now have all the leeway and can make an informed decision for the future at a later date.” In other words, the shares may only be temporarily held by the state.
Land wants to sell shares again soon
The country has three options to choose from in the future: The most likely variant is that a strategic partner, such as another energy company (eg Verbund AG), comes into play. But a long-term financial investor and even an IPO are also possible.
New debt is needed
The highest bid from an external bidder was 541 million euros, the state has to pay – after a discount – “only” 525 million euros. As repeatedly emphasized on Wednesday, this is below the value of the shares estimated by experts (which was between 628 and 739 million euros). Of course, the heavily indebted country must finance the purchase price with borrowed money.
For finance officer Anton Lang, it is still a “right and sensible step”. The interest expense is even lower than the expected dividend. Since the purchase price is of course not reflected in the current state budget, a supplementary budget must be decided on – a special session of the state parliament will take place on February 28, which will formally decide to purchase the shares.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
