Government of Montenegro signs EPCG shareholders’ agreement with Italian A2A power company
Podgorica, Montenegro (29 August 2016) — A new shareholders’ agreement between Montenegro and the A2A S.p.A power company from Italy in relation to the Elektroprivreda Crne Gore (EPCG) was signed earlier today by Economy Minister Vladimir Kavarić on behalf of the Government of Montenegro and Mr Oreste Bramanti on behalf of the A2A. The new shareholders’ agreement will be in force until 31 December 2016.
Following the adoption by the Government, the shareholders’ agreement was supported in the parliament. The agreement fully protects all the interests of the State, and in particular the project of the construction of the 2nd Block of the Pljevlja Thermal Power Plant which will be realised by the EPCG without State guarantees.
The pre-emption right has been established, which means that A2A is obliged to give notice to the Government if it wishes to sell its shares, providing clear information on the buyer and the terms under which it intends to sell the shares, allowing the Government to us its pre-emption right if it is not satisfied with the buyer. The pre-emption right remains in force after the expiration of the contract as well.
In addition, the A2A waivers the resort to arbitration, whereas the EPCG and the State will have the right to request the compensation of damages in cases of criminal proceedings and the liabilities arising from them.
If such circumstances emerge that affect the realisation of the new Agreement or the expiration of the Agreement, the value of the exit event under which the Government shall take ownership of all A2A’s EPCG shares is EUR 250 million to be paid in seven annual instalments. After the ‘put’ option is activated, if at all, the A2A is obliged not to block the decisions proposed by the State, and especially the decisions related to the 2nd Block.
Finally, A2A gets management rights, i.e. the right to propose managers, whose appointment is possible only if the persons proposed have been agreed with the Government (agreed/joint management as a control mechanism).