The offer price was determined on the basis of the assessment carried out by the advisor Mediobanca and also taking into account the capital value of EPCG, below which the Government of Montenegro would not have sold the quota especially if you consider that a part of the privatisation was carried out through an increase in capital.
On 29 August 2016, A2A SpA and the State of Montenegro signed the new Shareholders' Agreements for the management of the Montenegrin company EPCG; the agreement ended on 31 December 2016 and was renewed until 30 June 2017.
The main points of these new agreement were: i) the maintenance of the A2A management rights in EPCG, with main executives appointed by A2A, ii) the necessary sharing of decisions, between A2A and the Montenegrin government, on some "confidential matters" particularly important for EPCG, iii) the possibility of exercising a put option - valid until 1 July 2017- on the entire shareholding held in EPCG by A2A towards the State of Montenegro, upon expiry of the shareholder's agreement.
Up until and including 30 June 2017, A2A SpA had close contacts with the Government of Montenegro, in order to define a renewal of the agreement, but they did not find a consensual solution.
Therefore, on 3 July 2017, A2A SpA, having noted the impossibility of further extending the Shareholders' Agreements, exercised its put option. The put option involves the transfer of the entire shareholding held in EPCG by A2A, which is equal to 41.75% of the EPCG's total share capital, at the price, already agreed upon between the parties, of Euro 250 million. The transfer will take place in seven equal annual tranches, starting in May 2018. The number of shares fully owned by A2A - which will maintain their associated rights (to vote, to dividends) - will therefore decrease progressively until the transfer of the seventh tranche currently scheduled for 2024.
Following up on the press release dated 17 April 2018, the Parliament of Montenegro approved, on 27 April 2018, the agreement to accelerate implementation to two years (in place of the seven years originally envisaged) of the put option exercised by A2A on 3 July 2017 with regard to its entire shareholding in EPCG.
By virtue of the new agreement and thanks to the reduction of the payment period of the put option, the amount that will be collected by A2A will be 230 million euros, calculated as NPV of the shareholding of A2A in EPCG on the signing of the agreement.
Specifically, the facts that have occurred between 2018 and now regarding the matter of the implementation of the put option:
i) In the month of May 2018, the first tranche was paid by the State of Montenegro for an amount of €68.9 million, corresponding to the sale of 17,252,885 shares of the share capital of EPCG (the amount of 13.1%).
ii) In the month of September 2018, the collection was registered of the second tranche for an overall €51.7 million, corresponding to 13,052,876 shares in EPCG, completed with the acquisition of treasury shares by EPCG (buy back – an amount of 9.9%).
At the end of April 2019, the third tranche of the put option agreement was concluded by means of the payment by the State of Montenegro of €39.9 million (representing 8,826.438 shares in EPCG), while the fourth and last tranche, in accordance with the contract, shall be made in July 2019, by means of the acquisition of treasury shares by EPCG (buy-back) for €70 million.
As of 31/12/2018, investment in EPCG was booked at € 108,90 million in the A2A's separate financial statements.
Following the BoD decision of 1 July 2017 to exercise the put option on the entire shareholding in EPCG, the investment was reclassified as "non-current assets held for sale" in accordance with IFRS 5.