Although a final decision of the CEZ BoD will be taken on Monday, March 31, CEZ management has announced that it would not likely appeal the Anti-Monopoly Office’s recent ruling on CEZ’s merger with domestic power distributors at the Constitutional Court, which we see as positive.
Therefore, as per the government’s energy-sector restructuring plan, the state’s stakes in eight regional distributors will be transferred to CEZ, and CEZ’s 66% stake in CEPS, the transmission-grid operator, will be transferred to the state on Tuesday, April 1. CEZ must then three minority stakes and one majority stake according to the AMO’s decision.
Soon after the transfer, the first payment for the distributors (CZK 2 bil.) will be paid by CEZ, followed by approximately a CZK 4 bil. payment in the summer of 2003. CEZ will pay the government CZK 32 bil. in total for the stakes, part of which will be paid in the form of the 66% CEPS stake, which is now being appraised, while the rest should be paid in cash in four equal installments within four years. The payments would likely be financed from internal sources.
CEZ announced that it will have to offer minority shareholders buyouts in only two of the distributors (ZCE, STE). We estimate this could require at most CZK 7 bil. of additional finances. Nevertheless, CEZ is also considering making voluntary buy-out offers in some of the others distributors. We see this as neutral.
Jiří Soustružník