German group E.On plans EUR 90 mln investments in Romania this year

German utilities group E.On, one of the biggest gas and electricity distributors and suppliers in Romania, plans to invest some EUR 90 million this year in upgrading and expanding its gas and power distribution networks. Last year, the group invested EUR 94 million, and the total investments E.On has made since it first entered the Romanian market, in 2005, amounted to EUR 1.3 billion, the group’s representatives announced. “The distribution networks still need massive investments, because they were outdated in 2005 when we took over. To make these investments, we need legislative and fiscal stability and predictability. We wouldn’t want to see new taxes introduced overnight or modified without a minimum consultation,” said Frank Hajdinjak, CEO of E.On Romania. However, he pointed out that Romania remained a strategic market for the German group. “The operations in Romania are of a strategic importance for the international group that we are part of. Today, we are one of E.On’s five strategic markets, alongside Germany, UK, Sweden and Czech Republic. German group E.On paid some EUR 125 million to the Romanian state, in 2015, for a 31% stake in Distrigaz Nord, the company that held the monopoly for natural gas distribution in the northern half of Romania. Then it got to control 51% of the company after contributing EUR 178 million to a capital increase. E.On also took control of the former Electrica Moldova, the company that distributed and supplied electricity to six counties in North-Eastern Romania. The German group paid EUR 31.4 million to the state and brought another EUR 68.6 million to the company reaching a 51% stake. In recent years, E.On changed the structure of its operations in Romania. It merged the gas and power distribution operations in one company, E.On Distributie Romania, and the gas and electricity supply activities in another company, E.On Energie Romania. Both companies are coordinated by a management firm, E.On Romania. The E.On companies currently serve over 3 million clients in Romania, some 457,000 more than in 2005. Last year, the group had a consolidated turnover of EUR 1.08 billion in Romania, about the same as in 2013, the company’s representatives announced. E.On also opened a business services center in Cluj-Napoca, which provides accounting and HR services for all the group’s activities in Europe. The center recently reached 530 employees, double what it had last year. Romanian fund’s manager takes on German group E.On in corporate governance dispute Andrei Chirileasa, andrei@romania-insider.com