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In 2009 A2A S.p.A. acquired a 43.07% stake in Montenegrin electricity company ELEKTROPRIVREDA CRNE GORE AD NIKSIC (“EPCG”). Following the acquisition and the definition of the shareholder agreement, A2A S.p.A. obtained rights over the operations, management and coordination of generation plants, distribution networks and electricity sales. Assets under management included:

    “Perućica” hydroelectric plant has been operational since 1960 and it is the largest and oldest power plant in Montenegro. It has an installed capacity of 307 MW and over the last ten years it has on average produced ca. 860 GWh per year.
    “Piva” hydroelectric plant is located in Montenegro’s north-eastern mountain range. Its main activity consists of the production of electricity in peak mode. It has an installed capacity of 330 MW and over the last ten years it has on average produced ca. 753 GWh per year.
    "Pljevlja" thermal power station began activity in 1982; it is the country’s foremost condensation electricity production plant  with an installed capacity of 219 MW. In 2016 it produced ca. 1.2 TWh.
  • CEDIS, the company that operates Montenegro’s electricity distribution network.

Exercise of the put option for the sale of A2A’s stake in EPCG

On 29 August 2016 A2A S.p.A. and the state of Montenegro signed a new shareholder agreement relative to the management of EPCG to 31 December 2016. The new shareholder agreement was subsequently extended to 30 June 2017.
Due to there not being the conditions for a further extension of the shareholder agreement, on 3 July 2017 A2A S.p.A. exercised the put option for the sale of its entire EPCG shareholding – at the time equal to 41.75% – for a total value of €250 million to be paid in seven yearly instalments starting in May 2018 until 2024.
Following ulterior negotiations between A2A S.p.A. and the state of Montenegro, on 27 April 2018 the parliament of Montenegro voted in favour of accelerating the implementation of the put option, via the payment of four instalments between 1 May 2018 and 31 July 2019, for a total present value of €230 million.

In relation to the exercise of the put option, since 2018 the following events have taken place:

  • In May 2018 the state of Montenegro paid the first instalment of €68.9 million, corresponding to the sale of 1,252,885 EPCG shares (13.1% of share capital)
  • In September 2018 the second instalment of €51.7 million was paid by EPCG by means of a share buy-back of 13,052,876 shares (9.9% of share capital)
  • At the end of April 2019 the third instalment of €39.9 million, corresponding to 8,826,438 EPCG shares, was paid by the state of Montenegro

The fourth and last instalment is due to be paid in July 2019 by means of an EPCG share buy-back of €70 million.

Value of the EPCG stake on the A2A balance sheet

On 31/12/2018 the value of the EPCG stake in the unconsolidated A2A balance sheet, is of €108.9 million.

Following the Board of Directors’ decision on 1 July 2017 to exercise the put option on A2A’s entire stake in EPCG, the shareholding has been included in “non-current assets held for sale”, in conformity with IFRS 5 accounting principles.