CEZ has informed on Friday that Areva have failed in their bid to meet statutory requirements for building two new units of the Temelin Nuclear Power Plant. Other bidders (Westinghouse and Skoda JS/Atomstrojexport) have not yet been found to have failed to fulfill the awarding entity's requirements. Rosatom of Russia (owner of Atomstrojexport) reacted to the news by offering to consider the possibility of a partnership with Areva for Temelin. /Should be NEUTRAL for CEZ shares, nevertheless there may occur some doubts that the final price could be higher with just two bidders or the regulatory pressure from the EU on the CR could be higher without France support in the future. /
CEO Daniel Benes of CEZ said that a guaranteed electricity price for Temelin would not cost more than 5 bln. CZK per year. CEZ’s long-term interest, he said, is to lower its risk profile by acquiring more regulated assets (distribution networks, heating plants) and reducing the assets dependent on the electric price. /NEUTRAL; If the guaranteed price for Temelin enlargement to be introduced final costs will depend on the spread between the guaranteed rate and the market price. Futher development of heating plants is in-line with CEZ long-term strategy. /