Enea, Bogdanka and conspiracy theories – parquet

Source: Fotorzepa

The author: Cuba Krzysiak

Termination by Enea contract with Bogdanka coal supply is a powerful blow to the coal company. Analysts wonder whether this is purely a business decision or whether it has a second bottom.

Enea has been a major customer for the Lublin Coal Bogdanka. As analysts estimate, as many as 35 – 40 percent. annual production of Bogdanka sells just Poznan group to its power plant in Kozienice. Company in 2010. Signed an agreement for the supply of black fuel, which was in force for 15 years. However, Enea decided to terminate it earlier this year and is in the midst of price negotiations for 2016. The company argues that the contract obligated it to purchase coal at higher prices than could be purchased on the market today.

– We can not afford us so expensive coal, and the current contract terms and conditions differ significantly from the current situation on the market – explains Paul Orlof, vice president of Enea. – Termination of the agreement will contribute to the long-term improve the competitiveness of our whole group – said.

The contract expires only on 1 January 2018. In addition, the company still involves a contract to supply coal to built just next unit in Kozienice Power Plant, which will start in 2017.

Enea explanations are not convincing for all analysts. – Enea argues that not teamed up on coal prices for 2016. It is in my opinion far-fetched argument given that such negotiations are continuing after many months and certainly was still a chance for an agreement with Bogdanka – says Lukasz Prokopiuk, an analyst DM BOS . – It is worth considering whether it can Enea wants to get only better negotiating position in fixing the price of Bogdanka for the coming years or whether further plans to take over Bogdanka and hopes to reduce the rate of carbon companies and also facilitate negotiations with its owners, or it is a political decision which aims at attracting Silesian mines for the next recipient in the form of Enea – wonders Prokopiuk.

Similar scenarios also draws Piotr Nawrocki, analyst Vestor DM. – The most likely it

seems to me simply a desire to obtain by Enea better negotiating position and set new, presumably more flexible terms and conditions for long-term supply of coal, for example, reducing the volume of the “old block” after the launch of the new ultra-modern unit, which is planned for 2017 . – says Nawrocki. Hardly likely it seems to him while the worst-case scenario for Bogdanka assumes a significant reduction in volumes by Enea and purchase of coal by this group in the mines of Silesia. – Even if today Bogdanka offer higher prices than the Silesian mines, it is rather a transitional period, because the sale of stocks in the Coal Company and selling coal below the cost of production can not last forever. It is hard to expect that Enea has managed itself to ensure the long-term coal cheaper than Bogdanka. Especially from the perspective of Kozienice in Lublin mine has a geographic premium relative to the Silesian mines – selects Nawrocki. He adds that one can not exclude a more sophisticated scenarios, resulting, through political action. – It is possible in fact that Enea is interested in taking over Bogdanka and currently plays for the decrease in its valuation, or were induced to purchase KHW and has now decided that it needs to switch to a greater extent on the Silesian coal – wonders Nawrocki.

Speculation on the willingness of acquisition by Enea Bogdanka or KHW have their reasons. President of Enea Krzysztof Zamasz last interview with “Parkiet” and “Rzeczpospolita” has denied the reports in. The question is whether Enea considering buying one of these companies, he replied: – We analyze different scenarios and I would be extremely irresponsible manager, I was not looking for the best ways to securing optimal purchase price of coal for our gym. It is a priority for us, because it has a fundamental significance for the price we sell electricity – stressed Zamasz. – We have a generation units, and around stiff competition, which acquires coal from its own sources. We are constantly looking the target business model, which would be the best for the company and our shareholders – added the CEO of Enea.