According to CTK, two out of four owners of Czech Coal sold their stake (each 40%) to remaining two stakeholders for rumoured CZK 11.5bn. Czech Coal controls 51% stake in Mostecka Uhelna (MUS).
Our view: This transaction values MUS at CZK 28.2bn, in-line with what CEZ wanted to pay for it. There could be some positive cross-read for the value of CEZ’s Severoceske doly, which we value at some CZK 75 per tonne of accessible reserves, while Czech Coal transaction values MUS at some 120 per tonne of accessible reserves. The difference is clearly factoring-in different calorific value as well as longer time for extraction. Overall we see the news broadly neutral as CEZ already kicked off its Pocerady project with gas as a fuel and is not relying on ongoing negotiations with MUS.