Sinergia union subscribes to EDP privatisation share issue

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The Portuguese electricity utility, EDP, is being partially privatised and one of the unions involved in the sector, Sinergia, has taken the innovative step of subscribing to the share issue.

For the first time in Portugal a trade union has bought shares in a company being privatised, by taking a stake in EDP (Electricidade de Portugal). In the first phase of privatisation - Portugal's largest-ever - 30% of the company's equity is being sold to the public. The trade union in question is Sinergia (the Portuguese Power Industry Union) which is not affiliated to any of the union confederations.

Sinergia's strategy of buying into EDP has been assisted by a number of unions from European Union countries, specifically Belgium, Germany and the Netherlands. This assistance came not only in the form of finance, but also as know-how based on their own experiences.

During this first phase of EDP's privatisation, Sinergia has bought about 1% of the company's entire equity, represented by about six million shares. However, in the medium term it plans to acquire about 5% of the company's total equity. In so doing, the union intends to influence the company to adopt "a humanist rather than merely economic approach, as has been the case up to now".

Sinergia has also called on all EDP employees to buy shares, and it has plans to represent them by proxy at company general meetings, thus increasing its influence. Of the share tranche especially set aside for sale to EDP employees, they have bought 5,700,000 shares (slightly less than 1% of total shareholders' equity). The shares had to be distributed proportionally, as the issue was greatly oversubscribed.

Sinergia's strategy has attracted the attention of the media. In Portugal it is unusual for unions to buy into companies being privatised and to encourage employees do the same. However, Sinergia's leaders feel that their strategy exemplifies a new approach by Portuguese trade unions, involving new methods and aims, and that it will give them an active role in how companies are run.

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