Further comments by government officials again appeared yesterday regarding the possible floating of the state's 16% stake in CEZ, though neither of them surprised the market, being largely in line with the comment by the previous Cabinet, we believe. Deputy PM M. Jahn said that the government is unlikely to sell any shares until 2006 and that the inclination of a majority in the Cabinet is not to privatize CEZ immediately. Finance Minister B. Sobotka said that the usage of possible privatization proceeds must be set first, with CEZ being privatized afterwards irrespective of whether by the current or the next Cabinet. Source: Reuters, CTK.
Separately, the Cabinet also seems to be maintaining its position regarding CEZ's possible participation in the Severoceske doly privatization as Mr. Jahn and Industry Minister M. Urban support this plan, Bloomberg reported yesterday. Note that the Industry Ministry disclosed the plan in June, saying that CEZ and Appian Group may set up a joint venture that would buy the state's 55% stake in SD, a leading domestic coal miner, without a public tender. The government should discuss the plan by end-October. CEZ would contribute to the JV by its current 38% stake in SD and Appian would put in its 100% stake in another domestic coal mining company, Mostecka uhelna. Both CEZ and Appian would pay approx. CZK 4bn each for the 55% stake. Note that CEZ's possible bid should also reflect the strategic importance of having control over the entire vertical line in the CR.
Jan Hájek, Patria Finance