The Czech media quote a BBC report and other sources that the German government has approved a letter to the Czech calling for the halt of CEZ’s Temelin nuclear plant, citing concern over safety issues. The Czech side will not be officially informed until today, so the exact content of the letter is not known and the Czech side could not comment on it. The news is negative news for the stock, since the German federal government has previously been uninvolved in the Temelin dispute. The inner Czech Cabinet is to discuss Temelin at its Tuesday session, likely in connection with the report from Germany.
Separately, the ministries of industry and finance will likely propose to Cabinet on Wednesday that a power-sector privatization advisor be directly appointed without a tender by the end of August (the Ministry of Industry will propose Deloitte & Touche); that the privatization tender be launched in early September; and that a tender winner by recommended by the advisor by the end of the year. This is an ambitious schedule, and the year-end deadline corresponds to earlier government statements. The Ministry of Finance expects that the state’s package of stakes in CEZ and six regional distributors to fetch CZK 150 bil. We think the negative news on Temelin today will outweigh the privatization news.
(Ondřej Daťka)