The State acquires pre-emption rights for certain companies active in the generation of electricity under the amended FDI Decree as of 13 January 2024.
The amendment allows the Hungarian State (through MNV Zrt.) the option to step in with a right of first refusal where companies engaged in electricity generation, including solar power plants, are being transferred to foreign investors.
The Minister of Energy will exercise ownership rights over the companies acquired by the State through pre-emption rights.
In the case of transfer of shares in such companies, the notification to be submitted to the Ministry for National Economy (“NGM”) must indicate that the transaction is subject to pre-emption rights. When assessing the notification, NGM will involve the Ministry of Energy, and the exercise or waiver of the right of first refusal shall be based on the latter’s proposal.
The legislative change will result in an extension of the time limit for the administration of transactions covered by the right of first refusal from 30 to 60 working days, which may be further extended once by 15 calendar days. The extended time limit will have an impact on the closing procedures of the transactions concerned, particularly in terms of timing.
The pre-emption right does not apply to companies operating small power plants of household size (up to 50 kVa).
Alongside introducing the right of first refusal, the FDI Decree incorporates an additional revision to the wording of exemptions for transactions involving the foreign parent company of a strategic firm and related-party transactions. This amendment preserves the exemptions that were previously applicable to strategic companies with foreign parent companies.
Source:
Government Decree 561/2022. (XII. 23.) on the different application of certain provisions necessary for the economic protection of Hungarian companies during the state of emergency (‘FDI Decree’)
Government Decision 1576/2023 (XII. 19.) on measures relating to the acquisition of shareholdings by the Hungarian State in strategic companies with TEÁOR code 3511’08 Electricity generation