The privatization committee has recommended Enel of Italy, offering EUR 840 m, as the winner of the state's 66% stake in the Slovenske elektrarne (SE) tender. CEZ finished second, reportedly offering EUR 691 m while Inter RAO EUR came third with 547.8 m. Slovakia's finance minister, Pavol Rusko, said that the privatization committee's recommendation is not binding for the Cabinet, which can accept it, change it or even cancel the privatization. We assess the possible failure of CEZ to win the tender as positive news for the stock, since the bids (only limited information on their structure is available) seemed too aggressive. The finance minister will hold a press conference on the sale today. The presence of Enel in the region’s electricity generation market would certainly modify the structure of the competitive forces here. Nevertheless, given the current export capacity and orientation of the Slovak power industry, we see only a limited threat for CEZ in the short and possibly medium term, subject especially to the completion of the two blocks of SE`s NPP Mochovce and the timing of the closure of two blocks in NPP Bohunice.
Separately, the Slovak parliament passed a resolution obliging the Cabinet to complete the two unfinished blocks at the Mochovce NPP. Rusko said at a press conference last week that all three bidders, i.e. CEZ, Enel and Inter RAO, expressed their willingness to complete the construction of the two remaining blocks. Rusko also added that completion of the two blocks would be one of the key factors in the evaluation of the bids.
Tomáš Gatěk, Patria Finance