The selection of an advisor for privatization of CEZ was formally challenged

ABN AMRO has reportedly formally challenged the government’s selection of advisors for the privatization of CEZ and six power distributors and for the privatization of the gas industry.

Although the advisor for the CEZ & distributors’ privatization has already been formally declared (a Deloitte Touche/N.M. Rothschild consortium), a challenge could lead to a further delay in the privatization process. Privatization by the end of the year (which is the time frame of the Ministry of Industry) is widely considered quite ambitious, and another formal challenge would render this less achievable. Negative news for the stock.

Separately, CEZ announced that it would release its preliminary 2000 IAS results today (the exact timing was not specified). Since audited CAS results have already been released, the IAS figures are not likely to influence the stock. It is estimated that the audited CAS net profit of CZK 5.7 bil. corresponds approximately to an expected IAS net profit of CZK 7.2 bil. We do not expect much response from the stock unless the IAS net profit is significantly different from the CZK 7.2 bil. figure.

(Ondřej Daťka)