German utility Vattenfall Europe AG Thursday said it
has reopened the bidding process for its power transmission grid after the
company failed to agree on key issues with a financial consortium with which it
was in exclusive talks.
Vattenfall Europe spokesman Steffen Herrmann said the tender process has been
reopened to other suitors earlier this months, but declined to say how many new
parties have joined the process or identify their names.
Recent media reports cited unidentified sources as saying that Vattenfall
Europe is talking to Belgian power grid operator Elia System Operator SA
(ELI.BT).
A spokeswoman for Elia declined to comment on the reports that the company is
in talks with Vattenfall over the power grid.
Elia had competed for the electricity network before, but dropped out of the
process in summer, which resulted in the exclusive talks between Vattenfall and
the financial consortium.
Elia is understood to have pursued Vattenfall's grid with
Australia
's
Macquarie Group PLC (MQG.AU) at the time.
Herrmann added that the original timeframe that aimed at selling the 9,500
kilometer ultra-high voltage power grid by the end of the year was now unlikely
to be achieved.
Herrmann also said that Vattenfall has failed to agree on key issues in the
exclusive talks with the financial consortium consisting of Goldman Sachs Group
Inc. (GS), Allianz SE (ALV.XE) and Deutsche Bank AG's (DB) infrastructure fund
RREEF.
These issues include the purchase price, which people familiar with the matter
previously said was around EUR500 million.
Vattenfall's Herrmann also said the company still insists that any buyer of the
grid will guarantee adequate network investment as well as grid access free of
discrimination for any power supplier and increased cross border power flows.
The buyer of Vattenfall Europe's transmission grid will have to invest up to
around EUR3 billion in coming years in an expansion of the network to ensure
that
Germany
's growing offshore wind generation capacity will be connected to the
grid. A smaller part of the necessary capital expenditure has been earmarked
for grid maintenance.
Vattenfall's decision to reopen the talks to other suitors comes after people
familiar with the matter said the company had largely completed the sale to the
financial consortium.
Shortly after that, however, E.ON AG (EOAN.XE) earlier this month agreed to
sell its German power transmission grid to Dutch network operator TenneT TSO
B.V. for EUR1.1 billion.
Stretching around 9,700 kilometers from the Danish border in the north to the
Alps
in the south, E.ON's
grid is only slightly larger than that of Vattenfall. Still, E.ON managed to
achieve a much better purchase price than the around EUR500 million that the
financial consortium is understood to have bid.