MVM Paks II. Ltd. transferred to direct state ownership

10/15/14 6:00 PM
The Shareholders’ Meeting of MVM Ltd. has decided to transfer the shares in MVM Paks II. Nuclear Power Plant Development Ltd. – the company responsible for the management of capacity maintenance at Paks – to the value of HUF 10.157 billion to the Hungarian State, and to increase the registered capital of South Stream Hungary Ltd.

The Shareholders’ Meeting of MVM Hungarian Electricity Ltd. made a decision on 15 October to transfer the shares in MVM Paks II. Nuclear Power Plant Development Ltd. to the Hungarian State via Hungarian State Holding Company Ltd. Two major, recognised auditing and consulting companies, Deloitte Ltd. and Ernst&Young LLC carried out independent asset valuations, on the basis of which the purchase price is HUF 10.157 billion. MVM Ltd. established the Company with a registered capital of HUF 9 billion in the summer of 2012 in order to begin the analytical, planning, decision preparation and approval work associated with the new nuclear power plant units. In order to implement the largest project in Hungary in the 21st century, the MVM Group continues to cooperate with Paks II. Nuclear Power Plant Development Ltd. in the interest of the success of the construction project of the new units.

On 30 September 2013, MVM Ltd. paid the preliminary purchase price laid down in a contract for the interests held by E.ON in the Hungarian natural gas industry. After the technical closing of the transaction, in accordance with international practice, the independent auditor Ernst & Young prepared the final purchase price calculation on the basis of the reports of the new companies. Consequently, MVM Ltd. received back HUF 6.029 billion from the amount of the preliminary purchase price transferred to E.ON.

The co-shareholder in South Stream Hungary Ltd., Gazprom, began consultations with MVM Ltd. in July 2014 about the fact that it planned to relocate the terminal of the international natural gas pipeline to Baumgarten, Austria, whereby it became necessary to examine the preparation of a new route affecting the Hungarian section of the pipeline. The preparation of the establishment of the new Röszke–Városföld–Rajka route, which is about 50% longer, makes it necessary to increase the capital of the jointly owned company by HUF 10 billion, to which MVM Ltd. and Gazprom are contributing equally.

The Shareholders’ Meeting of MVM approved the consolidated 2013 Annual Report of the Company conforming to International Financial Reporting Standards (IFRS). The IFRS introduced last year at the National Energy Company represent a prerequisite for entering international money markets and commensurability, which, in addition to the use of the SAP corporate management system, further strengthens the transparency of the business activities of MVM.

In keeping with the regional and sustainable strategic principles of MVM Ltd., the Shareholders’ Meeting of the Company decided on the purchase by MVM of a 90% share in the Romanian company that owns and operates the 7.48 MW Úz Valley Hydropower Plant in Transylvania, Romania, on the basis of an independent asset valuation performed by KPMG. With the transaction, the National Energy Group further strengthens its renewable generation portfolio.