The Truth about Union Fenosa

mondongo · #1 01-08-2003, 07:24 PM

elcaribe.com posted the letter Union Fenosa sent President Mejia. The letter states that Edenorte and Edesur have approx RD$14.5Billion in debts.

1. Over RD$11Billion is either owed to Unioin Fenosa directly or is a loan guarantee by Union Fenosa.

2. About RD$1.5Billion is owed power generators and others.

3. RD$664Billion is owed to Local Dominican banks.

They list the RD$14.5Billion in debt but do not tell you what they have done with that money. I looked at the annual report on their website and found that they had a profit of about RD$6Billion in 2001.

The lette to Mejia asks for "only" RD$4Billion. The reason for that is that the only "net" debt that they have is what they owe to the Local Banks and the local power generators.

These scums are trying to pull a fast one over the equally imbecile Mejia administration. Mejia should tell Union Fenosa to go phuck itself.

PS According the Union Fenosa website, CDE owns 50.001% and has veto power over Union Fenosa.

Dolores · #2 01-09-2003, 08:15 AM

Please post the Union Fenosa web site link where they state that the CDE owns 50.01 % of the distribution companies.

Golo100 · #3 01-09-2003, 10:27 AM

I tought we, meaning CDE only owns 49% point something, just less of the 50%, which is why we are dead in the water.

TW

mondongo · #4 01-09-2003, 12:47 PM

http://www.uef.es/htdocs/accionistas...nsolidadas.pdf

This is the Union Fenosa annual report. Look at section 02.02 page 17 of the doocument, 5th paragraph.

Dolores and Golo, since both of you know Spanish much better than I, please read this and let me know if you agree.

Golo100 · #5 01-09-2003, 01:46 PM

Based on this financial statement it's 50-50%.

TW

Jane J. · #6 01-09-2003, 04:10 PM

But it says:

_{Las sociedades dominicanas "Empresa Distriuidora de Electricidad del Norte, S.A." y "Empresa Distribuidora de Electricidad del Sur, S.A.", en las que Unión Fenosa participa en el 49.999% y dispone de un porcentaje de control al 50% conjuntamente con Corporación Domnicana de Electricidad (CDE), entidad reguladora de las actividades eléctricas en la República Dominicana, son consideradas multigrupo por razón de las limitaciones a la autonomía de gestión que supone el derecho de veto, en cuestiones sustanciales, por parte de la CDE, aún cuando Unión Fenosa disponga de la facultad de nombrar a la mayoría de los miembros del Consejo de Administración. Este critero se viene aplicando con continuidad desde la incorporación de dichas sociedades al Grupo Unión Fenosa.}

Does Mejía know this?

Porfio_Rubirosa · #7 01-09-2003, 06:09 PM

If the situation is the same as for AES Ede Este, then the companies control the boards of directors and not the CDE. See:

http://www.corporatewindow.com/annua...99/page88.html

Does anyone know if AES is acting more crookedly or less crookedly than the Spaniards?

mondongo · #8 01-09-2003, 10:52 PM

In both the paragraph reprinted by Jane J. and in the letter to Mejia, U.F. claims that CDE has ultimate decision in matters of significance. It appears to me that CDE has >50% stake in EDESUR and EDENORTE, although it is not very clear in the annual report. You could argue it wither way. But if my claim is true, then this is significant because we have been led to believe by the govt and the press that it was U.F. that had >50% stake in the distributorships. Note also that U.F. also owns a generation plant in Vega.

In the annula report for AES, it shows that it has a 51% stake in EDE ESTE. That is not the case with Union Fenosa. AES also owns 24% of Itabo generating plant and 100% of Las Mina. The new generator that will use LNG is 100% owned by AES also.

It appears that the DR govt has sold out completely to the foreign power companies. They nearly own it all. Nice going, bozos.

Porfio_Rubirosa · #9 01-09-2003, 11:56 PM

Mondongo,

Assuming you can swollow privitization at all, what's wrong with one company controlling production and distribution. Right now you have three parties - the producer, the distributor and the regulator - all pointing the finger at each other when something goes wrong (and something ALWAYS goes wrong). Seems to me that some vertical integration would not be a bad thing here. Then you'd only have two parties - the "power company" and the "regulator" pointing fingers at each other.

Also, at this stage, what difference would it make if the CDE totally divests itself or not. The CDE does not appear to have active control, regardless of what any ownership agreements might say.

Seriously, it would be hard to believe that total privatization would be worse than half-assed privatization, assuming, again, that you can buy privatization at all.

Will divestiture happen? On the one hand, the only thing that the government would get out of it on paper would be a debt swap. Without actual cash for new Jeepetas, cognac and patronage payrolls, I don't know why the government would go for it. On the other hand, Union Fenosa may simply directly hand the 4X4s, Rolexes and booze to the officials instead. Really, it's not that hard to get what you want in the DR.

Golo100 · #10 01-10-2003, 08:45 AM

As bad as Union Fenosa is, I rather have them own everything than go back to the old ways of having a CDE with full of "botellas" and no electricity at all. The reason the PRD wants to have the power back is because they need more jobs for their hungry members, which I am not willing to support with my taxes.

Thank god we also got rid of the Sugar Mills and all those white elephants at the CEA.

The less government we have, the better.

TW