It is expected that the Cabinet will discuss CEZ privatization today, though the issue is not on its official agenda. Reportedly, revised bids by Enel/Iberdrola and Electricite de France did not fulfill the required tender criteria, and the inter-ministry commission has recommended that the tender be canceled.
We believe a direct CEZ sale, suggested recently by the Minister of Industry, is rather unlikely (it is unlikely that any company that did not take part in the tender would accept the government’s privatization conditions, which would likely remain unchanged); it is therefore highly improbable that CEZ would be sold before the Czech general election (June 2002). A new privatization tender, then, could actually start no sooner than summer/autumn 2002.
We believe the tender fiasco and the expected privatization delay are largely factored into the current CEZ share price.
(Jiri Soustruznik)