Listed metals and engineering group Mytilineos has signed a joint venture deal with Spanish power company Endesa as part of its plans to boost its energy business, the Greek company said yesterday.
The joint venture company is set to become the second-largest independent power generator in Greece, behind state-controlled PPC, as the country deregulates its energy market and expects to expand its operations further into Southeast Europe.
“The strategic alliance is an important step in the development of the Endesa European expansion plan,” the companies said in a joint statement. “(It is) a step forward in the leading position of Mytilineos in the Greek energy market.”
The joint venture will have initial capitalization of 1.2 billion euros, with Endesa, which is currently the target of competing takeover bids, holding a 50.01 percent stake, the companies said in a joint statement.
The company is also expected to enter the retail energy market after EU liberalization rules are enacted in July 2007, it said.
Mytilineos, which is broadening its operations to include power production, will contribute its thermal and renewable energy assets and licenses, the statement said. The new company will construct and operate natural gas and coal power stations, renewable energy units, and will also include electricity and emissions trading units, it said.
Mytilineos and Endesa also submitted a bid to build a 600-megawatt coal plant in Greece, the Greek company said in a separate statement.
The cost to build the plant is expected to be 720 million euros, while overall investment in the plant is expected to be about 890 million euros, it said.
Mytilineos also announced it will absorb its Aluminium of Greece (AoG) and Delta Project units as part of its operational restructuring plans. “The group’s administration decided to begin transformations and corporate restructuring in order to capitalize on the group’s energy assets,” Mytilineos stated.
Mytilineos will take over both AoG and Delta and separate the company into a power generation and trading unit, and a production, construction and alumina trading unit, the statement said.
Aluminium shareholders will be offered 0.3954 Mytilineos shares for every Aluminium share they hold, while Delta shareholders will be offered 0.1888 Mytilineos shares for every Delta share, the statement said.
(Reuters, 28/03/2007)