The Czech Cabinet last night approved a proposal by the Ministry of Industry that calls for the state’s 67.6% stake in CEZ be sold in its entirety to a strategic investor, and that CEZ’s transmission grid (CEPS) shall not be reacquired by the state in one year, as had been originally intended—the government will retain a 3% stake in CEPS instead (Czech Press Agency). Positive.
In addition, Lidove noviny reports today that the Ministry of Industry wants to attach an additional condition to the privatization tender, namely that the acquired assets (CEZ, transmission grid, five regional distributors) must be held by the new owner for a minimum of 10 years and that divestiture may take place only after that period. The ministry cites fears of “speculative capital” in seeking the condition. The proposal is being addressed by an inter-ministry commission, though a conclusion has not yet been reached. Such a condition could deter investors who are interested only in certain CEZ assets (and could possibly negatively affecting the privatization price). Neutral at the moment, with a possible downside if approved.
(Jiri Soustruznik)