(Jiří Soustružník) Czech Press Agency yesterday reported that CEZ formally terminated its supply contract with E.ON of Germany. Nevertheless, the contract was effectively terminated as of July 1, when E.ON stopped electricity purchases from CEZ. According to a CEZ spokesman, both companies still seek a solution, but E.ON is reluctant to pay a fine (which we estimate at 25% of non-purchased electricity value, approx. CZK 250 mil.), and CEZ is not willing to supply electricity to E.ON exclusively from coal-power plants, and the companies have not managed to find another buyer which would replace E.ON. This does not represent new information, and we do not expect reaction from the stock.
Separately, we were informed by CEZ spokesman Ladislav Kriz that the CZK 600 mil. penalty payment CEZ received from Skoda Praha (Temelin’s general contractor) will take the form of equipment and service supplies. Neutral.