In early May, it was reported that pipe-fitter-turned-billionaire business guru Lőrinc Mészáros was one of four contenders positioning themselves to buy the Mátra power plant. Now, Index.hu reports that only two contenders remain — Hungary’s state-owned energy giant MVM and the Czech Republic-based EPH.
But Mészáros may not be out of the picture, as rumors in the market suggest his role in the story might be less conspicuous.
According to Index.hu’s source, who asked not to be named, Mészáros may be involved in the future of the plant as a partner or supporter. The online daily reached out to EPH communications director Daniel Častvaj to find out whether there is any basis to rumors of Mészáros’ involvement in the deal. Častvaj declined to comment on any ongoing deals.
But rumors suggesting Mészáros may have gotten behind EPH, an emerging Czech energy powerhouse, may not be entirely unfounded.
“Both are positioning themselves very well,” a source tells Index, commenting on the positioning of Mészáros and EPH. “Mészáros, who has no background in the sector, could not win without EPH. But EPH, which lacks political support, would have no chance without Mészáros.”
Rumors circulating about the sale of the power plant suggest that MVM made a small bid, compared to the larger bid from EPH, but this may be explained by the difference in the two companies’ business philosophy.
Should an EPH-Mészáros collaboration result in the acquisition of the power plant, which entity would profit the most from the opportunity? EPH’s finance and legal teams are seasoned veterans. Despite Mészáros’ lack of experience in the energy sector, he has surrounded himself with people who have enough transactional experience to defend the Hungarian energy interest.
Index reports that investors will have to spend quite a bit on the power plant in the coming years. Sources tell the daily that the plant was in outstanding operational condition forty years ago, and has been well-maintained, but it is becoming increasingly difficult for it to abide by current environmental protection regulations.
The power plant’s permits are due to expire in 2025, which, in turn, presents its investors with a range of other problems. If the plant ceases operations when its permits expire, it must compensate the employees it will lay off. Coupled with other costs associated with winding up the plant, Western European experiences indicate these costs may reach into the tens of billions of forints.
The Mátra lignite-fired power plant has some 2,100 employees and is fully powered by local resources. It produces 13 percent of Hungary’s electricity, and in the past five years has had revenue of HUF 94-104 billion at huge – but decreasing – profits. The German RWE-EnBW group owns 73 percent of the plant, MVM owns about 26 percent, and about 1 percent is held by smaller shareholders.