Notification on material event
Regarding AB Energijos Skirstymo Operatorius decision to appeal the decision of the National Commission for Energy Control and Prices
Lietuvos Energija, UAB, (hereinafter – the Company) identification code 301844044, registered office placed at Žvejų str. 14, Vilnius, Republic of Lithuania. The total nominal value of issued bonds 600 000 000 EUR; ISIN codes XS1646530565; XS1853999313.
On 19 November 2018, the subsidiary of Lietuvos Energija, AB Energijos Skirstymo Operatorius (ESO) adopted a decision to appeal to Vilnius Regional Administrative Court regarding the Resolution No O3E-334 “On the recalculation of price cap limits for the distribution services by medium and low voltage grids of AB Energijos Skirstymo Operatorius for 2019” adopted by the National Commission for Energy Control and Prices (hereinafter – the Commission) on 17 October 2018 whereby the price cap limits for the ESO electricity distribution services were set for the year 2019.
By determining the price cap limits, the Commission reduced the allowable rate of return on investment which was calculated by applying not the base of the asset value determined according to the accounting model of long run average incremental costs, approved by the Commission, but the base of the historical asset value. In the opinion of ESO, these adjustments of the rates of return on investment no longer meet the valid regulation for determining state regulated prices.
The Commission’s decision on the determination of the price cap limits for 2019 (in the absence of unambiguous clarity regarding the consistency of principles of the applied regulation) and practical application of normative documents may have a significant negative effect on the value of the ESO assets as well as the negative impact on Lietuvos Energija investments on ESO value. Possible effect will be clear when an independent property valuer completes valuation of the ESO assets.
More information: Laura Šebekienė, Head of Corporate Communications of Lietuvos Energija +370 633 99940, email@example.com