Vatenfall fails to conclude deal for acquisition of GZE

The Swedish power concern Vatenfall and the Treasury Ministry have failed to clinch a deal for privatization of energy distributor Gornoslaski Zaklad Elektroenergetyczne (GZE). Vatenfall scooped the competitive tender for exclusive rights to negotiate the takeover of GZE before the deadline of Nov. 23. According to those familiar with the negotiations, Vatenfall is rumored to have accepted the offer subject to some minor concessions from the Treasury. Unofficially, Vatenfall demands the Treasury and Economy Ministries guarantee that GZE creditors will not impose unfavorable conditions on the new owner. Besides, Vatenfall is asking for powers to freely set the price of energy distribution proportional to the charge levied by power grid Polska Siec Elektroenergetyczne (PSE), an exclusive privilege of the Energy Regulatory Office (URE). Vatenfall's anxiety emanates from the recent deterioration of GZE's liabilities, which have skyrocketed by zl.100 million since June to zl.0.5 billion. The debts are a result of an Economy Ministry directive barring GZE from a restrictive debt-collecting policy from the big nonpayers -the mining industries, the railways and the defense industry. A recent 300% hike by the PSE on its supply charges exacerbates the situation. (Puls Biznesu, p.4).