The Cabinet yesterday canceled the CEZ privatization tender because no bids fulfilled the required criteria. The ministries of industry and finance now have to submit a proposal on how to proceed with the issue of CEZ’s sale by the end of February. A direct sale or a privatization halt are the main options. We believe a direct CEZ sale, suggested recently by the Minister of Industry, is unlikely (given the strict selling criteria); it is therefore unlikely that CEZ would be sold before the upcoming Czech general election (May/June 2002).
We believe the tender fiasco and expected privatization delay is largely factored in the current market price.
(Jiri Soustruznik)