New privatization bids should be submitted today, and the Cabinet should next discuss CEZ privatization on Wednesday, January 9. We believe that the current tender is likely to be canceled due to the negative affect on bidding of extremely restrictive privatization conditions (especially the required minimum price of CZK 200 bil. for CEZ and six regional distributors). Although the Minister of Industry indicated that CEZ could also be sold directly (i.e., without a tender), we believe this scenario is unlikely. It is rather likely at the moment that CEZ privatization will be delayed at least till the second half of 2002 (after the June general election).
Separately, the Czech Press Agency reports today that CEZ produced 52.2 TWh of electricity in 2001, a 2.6% y-o-y increase. This is in line with our expectations; we expect net IAS profit to reach CZK 9.98 bil. in 2001.
(Jiri Soustruznik)