The Cabinet should discuss a plan to give CEZ exclusivity in the sale of the state’s 55% stake in Severoceske doly today. Should the Cabinet approve the plan, CEZ will have 90 days to present its bid. CEZ already owns 37% in SD. While we would view a CEZ purchase of SD as positive for CEZ from the strategic point of view, we believe that CEZ is not under any pressure to pay a high price for SD, in particular as it has already secured long-term coal supply contracts with both SD and Mostecka uhelna.
Separately, E.ON CR’s CEO, Michael Fehn, said in an interview with Hospodarske noviny daily that the electricity price in the Czech Republic is well below its normal level in the EU and therefore should be rising in the future. Note that wholesale electricity prices are 18% below those in Germany.