(Adds details, quotes, background)
WARSAW May 19 Poland's biggest power producer
PGE has agreed to buy French group EDF's local
power and heating plants for 4.51 billion zlotys ($1.2 billion)
including debt, in a move to increase market share and give the
state more control over the country's energy assets.
In March Enea, another state-controlled utility,
closed a deal to buy the 1.9 gigawatt capacity Polaniec
coal-fired power plant from French group, Engie.
The deal to buy EDF's plants, which include eight combined
heat and power plants and a 1.8 gigawatt coal-fired power plant
at Rybnik, in the south of the country, is expected to be
concluded by January 2 2018, PGE said.
The enterprise value put on the deal comprises 2.45 billion
zlotys for EDF Polska's equity and 2.06 billion zlotys of net
debt, implying a price multiple of 4.1 times EDF Polska's
earnings before interest tax, depreciation (EBITDA) last year of
1.1 billion zlotys.
"We will finance the deal from our own funds and we should
not have any problems with that," PGE Chief Executive Henryk
Baranowski said, adding that PGE had 4.6 billion zlotys in cash
as of the end of March.
Earlier this month PGE suspended dividend payouts due to the
Shares in PGE were up 3.73 percent at 11.40 zlotys by 1203
GMT, when EDF's share price was up 3 percent at 9.22 euros.
"I am glad of this transaction, as I will not have to be
worried about the investor's plans," Poland's Energy Minister
Krzysztof Tchorzewski told reporters at a news conference,
referring to the fact that PGE is majority-owned by the state.
Last year the energy ministry blocked the sale of the EDF
business to two private investors - Australia's IFM Investors
and Czech utility EPH, citing concerns over the country's energy
Tchorzewski said that as a result of the acquisition PGE's
share of the country's power generation capacity would increase
to 45 percent from 36 percent, while PGE said the acquisition of
the cogeneration plants would increase its district heating
interests by 177 percent.
($1 = 3.7691 zlotys)
(Reporting by Agnieszka Barteczko; Editing by Marcin Goclowski,