According to CTK, Bulgaria finally approved the sale of TPP Varna to Russian UES for EUR 578.8m. However, soon afterwards UES refused to sign the contract as considers the conditions not favorable. Further steps are not clear as the Bulgarian privatization agency has considered either canceling the tender’s results or following up with talks with the second bidder, in that order, which was CEZ. The latter possibility would be in line with the Bulgarian efforts to join the EU in 2007, as it requires energy market destructuralization, but this is probably only theoretical. We believe this news might be potentially positive for CEZ and reiterate our Buy recommendation.