CEZ may reportedly pay an extraordinary dividend by the end of 2004 should it not conclude any substantial foreign acquisitions this year, Reuters reported yesterday citing a source from the company. The dividend would come at the request of the government searching for budget revenues. According to other unnamed sources, the dividend may reach approx. CZK 1bn or CZK 1.70 per share. Note that CEZ approved a regular gross dividend of CZK 8 per share to be paid out on August 2.
We have expected a total 2004 dividend of CZK 10 per share and the above would thus be in line with our models, reflecting a sufficient (i.e., for available acquisitions and the additional dividend of several CZK per share) short and medium-term free cash flow generation ability and borrowing capacity by CEZ.
Separately, CEZ, together with other four companies (E.ON of Germany, Union Fenosa of Spain, AES of the US and Public Power Corp. of Greece), has qualified to submit a non-binding bid for two Romanian power distributors, Electrica Oltenia and Electrica Moldova. The state is selling its 25% stakes and the new strategic investor will be obliged to raise its holding to 51% through a share capital increase.
There is virtually no information available to the public related to the financial and operational performance of these distributors. We are, therefore, unable to provide comments related to their valuation. We believe this acquisition should be least important for CEZ, after its focus on Slovenske elektrarne, Bulgarian distributors and possibly distribution assets in Poland and other CE countries. Source: Reuters.
Jan Hajek