ARGENTINE GOVERNMENT REQUESTS 'EXPRESSIONS OF INTEREST'
IN SALE OF ELECTRIC UTILITY
NEW YORK, Nov. 26 /PRNewswire/ -- The Government of the Republic of Argentina today published a "Request for Expressions of Interest" for the sale of Servicios Electricos Del Gran Buenos Aires (SEGBA), the state-owned electric utility.
Interested parties should contact one of the Government's financial advisers, The First Boston Corporation, Kleinwort Benson Limited, or Banco General de Negocios, at the following addresses:
Daniel B. More, director, The First Boston Corporation, 55 East 52nd Street, Park Avenue Plaza, 41st Floor, New York, N.Y., 10055; Richard Morse, director, Kleinwort Benson Limited, P.O. Box 560, 20 Fenchurch Street, London, EC3P 3DB; or Juan Carlos Iarezza, head of investment banking, Banco General de Negocios, Esmeralda 130, 6th Floor, (1035) Buenos Aires, Argentina.
SEGBA, which generates, distributes, purchases and sells electric energy, was created in 1958 as a government majority-owned corporation. It is the exclusive distributor of electricity to greater Buenos Aires. The Government of Argentina is currently the only shareholder.
This transaction exclusively comprises the privatization of SEGBA's distribution and marketing services, which will be divided into two franchises. SEGBA's electricity generation services will be privatized simultaneously, but by separate offer.
The two distribution and marketing services divisions employ approximately 15,000 individuals, and contain all networks, installations and equipment of low, medium, and high voltage electricity to 200 KV. The number of employees and the assets to be allocated to the two individual service territories will be based on achieving optimum efficiency and will be explained in greater detail in the Offering Memorandum.
The Government of Argentina adopted a detailed program to privatize state-owned companies in August 1989. This program was supplemented by a renewed austerity effort in March 1991, designed to reduce inflation rates through major cuts in public sector employment and expenditures, closing unprofitable state-owned enterprises and increasing tax revenues.
The privatization of SEGBA is an important part of the government's program. It is expected to improve the quality of electric service, while reducing costs and adding stability to the supply of energy to SEGBA customers. In addition, the sale should strengthen the Argentine Government's efforts to further diversify the industrial base and employment opportunities within the country.
SEGBA services approximately 4 million metered users, or 12 million people -- both commercial and residential users -- in a 13,800 square kilometer area. From 1986 to 1990, the number of consumers serviced per employee increased from 180 to 197. Energy sold per employee during the same period increased from 580 mwh/year to 650 mwh/year, respectively.
/CONTACT: Daniel B. More, director of First Boston, 212-909-2345; or Richard Morse, director of Kleinwort Benson, in London, 71-956-5915; or Juan Carlos Iarezza, head of investment banking of Banco General de Negocios, in Buenos Aires, 1-334-6423/ CO: Servicios Electricos Del Gran Buenos Aires ST: IN: UTI SU: TNM FC-TS -- NY018 -- 7201 11/26/91 10:13 EST