Budapest would buy back the sewerage works for nearly HUF 17 billion
November 25, 2022 – 06:47
The Budapest municipality will buy back the minority share package of the Capital Sewerage Works (FCSM) sold 25 years ago, if the general assembly and the municipality approve – writes Népszava.
In 1997, the capital sold the company’s 25 percent French plus 1 voting minority share package for HUF 16.5 billion to a consortium consisting of German-French companies, from which it was transferred to the Veolia group seven years ago.
In 1997, the Budapest management concluded a rather interesting contract, because the profit was not linked to the increase in turnover or price increases, but to the operation of the company and the cost reduction achieved. Despite the fact that the capital municipality remained the majority owner,
due to special dividend payment rules, the minority shareholder receives 75 percent of the dividend fund, while the majority owner, the capital, receives only 25 percent.
Already in 2019, Gergely Karácsony announced that, after the Capital Waterworks and Főgáz, he would also recover the sewerage works in the capital. According to the article, the privatization contract expires in November, so the capital now has the opportunity to buy back the package.
Deputy Mayor Ambrus Kiss the People’s Voice said, the HUF 16.9 billion transaction would be carried out from the company’s retained earnings, so there is no need to involve other external sources. With the minority shares, the capital, which becomes the sole owner of the company, also gets back the management rights and corporate governance. The deal must be approved by the Competition Authority and the Energy Authority.