According to a Ministry of Industry proposal, CEZ’s transmission assets, operated by the 100%-owned subsidiary CEPS, will not be sold back to the state one year after CEZ privatization as was planned. Instead, a 3% ownership stake in CEPS will be acquired by the Cabinet toward maintaining an interest in the company, the HN newspaper reports. The Ministry of Industry also proposes that the state sell its entire 67% stake in CEZ (previously the Cabinet intended to sell 64%, retaining an interest of 3% in CEZ) and to guarantee the influence of state contractually. Should the Cabinet agree with the proposals (which is likely, given the increased pressure on the fiscal budget), CEZ would keep the valuable transmission monopoly (although its value will eventually be determined by regulator’s conduct). Positive, though the stock is unlikely to react.
Separately, HN reports that the Czech Securities and Exchange Commission (SEC) said yesterday that it would possibly require the buyer of the state’s stake in CEZ to make a buy-out offer to minority shareholders, and that this is behind the stock’s fall yesterday. SEC spokeswoman told us this morning that the commission has not adopted any such position.
Also separately, HN reports that today the city of Plzen will decide to whom it will sell its minority stake (2%) in Zapadoceska energeticka, a regional power distributor. If the stake is sold to the state, the state will gain the majority in the company, and the distributor would then be privatized together with CEZ and five other distributors. Zapadoceska energeticka is strategically situated at the Czech border with Germany and Austria, and it would be therefore be positive for CEZ if it were thus privatized together. Neutral at the moment.
(Jiri Soustruznik)