The group will set up jointly with Endesa a new energy company (EnerCo), which will seek to expand into Greece and SEE. The new entity will have a total equity of €1.2b. Mytilineos assets have been valued at €600m, while Endesa will contribute an equal amount in cash. Mytilineos will contribute its 334MW CHP in Viotia (valued at €190m), its 430MW CCGT plant in the same area, the production licence for a 400MW CCGT in Volos and the electricity trading licence of 310MW (total value at €100m) and its renewable asset portfolio (€160m). Endesa will hold a 50.01% share in the JV.
Management stated that the two groups have set a debt-to-equity ratio target of 60/40, which implies that EnerCo can raise debt of up to €1.8bn. The two groups plan to list EnerCo in a stock exchange by fall 2010. Furthermore, Mytilineos and Endesa submitted a power generation licence application to RAE for a 600MW clean coal plant. The total investment is expected to reach €890m and will be funded by the new entity. According to management, the new coal plant will import coal of 3m tonnes pa. Following the deal with Endesa, Mytilineos also announced the absorption of Aluminium of Greece and Delta Project. In addition, Mytilineos announced the spin-off of ALG metal & mining and energy business which will be carried over to its 100% subsidiaries, as well as the spin-off of Delta Project metallurgical construction & EPC business which will be sold to Metka for €8m. The triple merger is expected to be finalised by January 2008.
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