In 2016, state-owned Swedish utility Vattenfall sold its German lignite assets to Czech investor EPH, which teamed up with Czech private equity group PPF Investments, for an undisclosed sum. A peak at EPH’s 2016 annual report shows, however, that the price tag was just over SEK 100 million.
The report also reveals that the value of EPH’s lignite business, based on estimated future returns, is around SEK 6 billion (at today’s exchange rate).
During the first 14 months in which the buyers owned the business, net profit was just over SEK 2 billion, according to EPH’s 2017 annual report.
Elsa Widding, a former official at the Ministry of Enterprise and Innovation with responsibility for several state-owned companies, says the sale was not financially right and it bears a striking resemblance to the Nuon deal, which led to massive write downs for Vattenfall.
Vattenfall’s former CFO Mats Ekman holds with Widding, who is also his ex-partner, suggesting political pressure was brought to bear on the utility.
Chief Executive Magnus Hall denies this was the case and that the deal was right for Vattenfall, both strategically and financially. “Brown coal does not fit into the company,” he says, as he points out that the price of carbon emission rights has risen by 250% this year, which means that the profit margins on brown coal have not increased at the same rate as the price of electricity.
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