Romania will finish the sale of the 24.6% stake in Electrica Oltenia to CEZ today. Back in February, CEZ purchased the company for EUR 47.4m and agreed to raise its stake to 51% for another EUR 102.6m.
Separately, E.ON, which controls 2 distribution companies in the Czech Republic, said that it plans to increase prices for households by 10% yoy excluding VAT as of January 2006. CEZ also plans to increase the household electricity price by up to 10% yoy, which would be in line with our expectations. The increase depends on the regulator’s decision regarding the prices for electricity transmission, which should be known by the end of November. We expect a 4-5% yoy increase in distribution fees due to the required separation of electricity sales and distribution. Wholesale prices are to increase by 14.3% yoy, translating into an increase of around 5% in the retail price.
Separately, the Hospodarske noviny daily repeated that CEZ and E.ON are in talks to jointly build a new power plant. Earlier there was speculation that it may be a gas power plant. CEZ does not have any gas power plant in its portfolio.
The Bulgarian privatization agency has postponed its decision on the sale of the Varna power plant to the Russian UES by 15 days. Note that UES won a tender for 2 power plants - Varna and Rousse - ahead of CEZ. The Bulgarian anti-monopoly office ruled that UES may purchase only one plant, giving CEZ some chance to step back into the game.