According to Bloomberg, CEZ is interested in buying Slovenia’s dominant power producer and distributor, Holding Slovenske Elektrarne (HSE). Slovenian government has 100% stake there and plans to offer 26% stake to a strategic investor, 23% through the stock market in the first phase (until summer 2008), while keeping 51% stake. The second phase expects to be realized in 3 to 5 year horizon with additional 25% stake offered to as strategic investor. Company has 3 hydropower plants of combined installed capacity 852 MW and 2 coal-power plants with combined installed capacity of 995 MW. Besides HSE owns a coal mine, which is one of the most important source of lignite coal in Europe. No price information has been disclosed so far.
Our view:
As HSE fall into the region of CEZ’s interest for the acquisitions and as power plants has secured fuel we see this step positively from strategic point of view. We would wait to comment on this acquisition until the tender conditions and price are known, thus for the moment we see the news as neutral.