The head of the privatization department at the Ministry of Finance, V. Srba, said he thinks that CEZ should sell not only 66% stake in its fully owned subsidiary operating the transmission grid (CEPS), but the whole 100% stake. Importantly, he said that the 100% stake in CEPS could be swapped for the state’s stakes in regional distributors without CEZ paying anything further for the distributors. Should the transaction be performed in this manner, CEZ value would be boosted by at least CZK 20 bil. (CZK 33 per share), based on our valuations. Although we do believe that CEZ value will increase given the planned transactions, we are rather skeptical as far as the likelihood of such an extremely favorable scenario is concerned. The valuation of the relevant companies should be completed by the end of April.
(Jiri Soustruznik)