Armenia declares 100% of ENA shares to be of overriding public interest

The government on October 15 declared the 100% shareholding in Electric Networks of Armenia (ENA) CJSC to be of overriding public interest.

In 2025, the Armenian government enacted emergency legislation to take over the management of ENA, which is owned by Samvel Karapetyan’s Tashir Group, citing alleged mismanagement by the power distributor. It later announced plans to nationalize the company. ENA has denied the allegations of mismanagement.

The draft decision was presented by Minister of Territorial Administration and Infrastructure Davit Khudatyan at the Cabinet meeting.

The minister recalled that the Public Services Regulatory Commission had suspended ENA’s electricity distribution license. Following this, the shareholders were offered the opportunity to sell the company’s shares to the Republic of Armenia, but no response was received within the established deadline.

Khudatyan said the procedure for declaring the shares to be of overriding public interest was subsequently initiated. Public hearings were held, and the actions prescribed by law were carried out.

Prime Minister Nikol Pashinyan addressed the valuation of the shares and the amount to be paid to the owners.

“How will it be determined how much we will pay? And can we already say approximately how much we will pay?” the prime minister asked.

Khudatyan explained that the valuation would be conducted by an appropriate organization. The assessment would take into account investments, dividends paid, and the company’s liabilities. The shareholders would be notified of the proposed price and could either accept it or commission their own valuation through another appraiser meeting the established requirements.

Pashinyan stressed that the company’s liabilities must also be taken into account during the valuation. By way of a hypothetical numerical example, he explained that a high turnover does not in itself imply a correspondingly high value if it is accompanied by significant liabilities.

The prime minister also expressed the expectation that the competent authorities would examine how ENA had been privatized and verify the legality of the privatization.

“We expect the relevant Armenian authorities to also examine, in parallel, the privatization of Electric Networks of Armenia and its legality. However, we are not linking the two processes, because neither impedes nor precludes the other,” Pashinyan said.

The Ministry of Territorial Administration and Infrastructure will coordinate the takeover and be responsible for its implementation. Within two months of the decision entering into force, the ministry must draw up a record describing the property. This deadline may be extended once, by no more than two months.

The valuation of the shares at market value is to be organized within three months of the record being drawn up and approved.

The valuation will take into account the company’s actual, contingent, and off-balance-sheet liabilities and risks, regardless of whether they are reflected in its financial statements or audit reports. The review will also cover loans, guarantees, court and arbitration proceedings, potential claims, and the history of ownership since the privatization.

The shareholders may submit a report prepared by an independent appraiser. They will also be given the opportunity to participate in discussions of the property description record and to appeal it to the ministry or a court within one month of receiving it.

The deadline for initiating the share transfer process is May 1, 2027. The deadline for commencing implementation of the purpose of the process is July 1, while the process must be completed by October 1.

According to the government, approximately 70% of Electric Networks of Armenia’s shares are owned by Tashir Capital CJSC, while approximately 30% belong to Liormand Holdings Limited.

According to the explanatory note attached to the draft decision, the purpose of the takeover is to ensure uninterrupted electricity supply to the population, energy security, the normal operation of social and strategic facilities, and the protection of consumer rights. The ministry has stated that interim management in itself cannot serve as a final solution for the system’s long-term and sustainable management.