CEZ's board of the directors on Friday dismissed CEO J. Mil (Mr. Mil was dismissed from his position as head of the board of the directors on Thursday). The move reflected the dissatisfaction on the part of the state (CEZ’s 67% majority owner) with some of the company’s recent steps (e.g., a recent decision to bid for several coal-mining companies). A new CEO should be appointed in a month, the Czech Press Agency (CTK) reported.
Separately, the Bulgarian government started privatization of 67% stakes in each of its seven electricity distributors on Friday, CTK reported. The seven companies (which distribute 70% of Bulgaria's power supply) have been placed in three groupings, two consisting of two companies and one of three. CEZ has said that it intends to submit an indicative bid for one of the groups (the strategy was reportedly approved by CEZ's supervisory board). Bids should be submitted by the end of January 2004.
CEZ's potential interest in pursuing other central and eastern European power assets has been recognized, and given fair prices the acquisitions would be positive for CEZ (e.g., it would improve CEZ's generation/distributing assets ratio, and it would provide an indication of CEZ's ability to acquire and manage foreign assets).
CTK also reports that CEZ may not be allowed to participate in the tenders for domestic coal-mining companies due to procedural reasons. We do not see this issue as significant for CEZ stock.