CEZ: Bulgaria is set to cancel the power plant privatization. CTK has released information that the Bulgarian Minister of Economy and Energy, Rumen Ovcarov, has declared that the government may cancel the privatization of the Varna power plant. Note that UES won a tender for two Bulgarian power plants, Varna and Russe, while CEZ finished second. According to the decision of the Bulgarian anti-monopoly regulator, UES could purchase only one and chose Varna. As UES has still not signed the contract, the Bulgarian government is “likely to wait only until the end of this week and then may cancel the tender”, Minister Ovcarov said. Thus, CEZ could be still in the game for this acquisition. Originally, CEZ offered EUR 287m for Varna, which has an installed capacity of 1,260MW (or 10% of CEZ's capacity). We believe this news can have a positive impact as Bulgaria is one of the CEZ’s target countries. We reiterate our BUY recommendation.