Reuters informed that CEZ together with ten other companies picked up documents for heating plant in Varna, Bulgaria. Bidders will be short-listed by 25 September 2006, with binding bids for 100% state stake to be submitted by 23 October 2006. The Varna heating plant has 80MW of installed heating capacity and uses natural gas as a fuel. It serves 14,000 households and businesses in the region. 2005 sales stood at some USD 4.83m.
Our view:
Besides power plants, CEZ is screening also heating plants in the region of CEE and SEE, which could provide some synergies. Note that heating plants usually have some installed capacity to generate also electricity. At the moment CEZ is formally finalizing purchase of TPP in Varna, Bulgaria bought earlier this year. At the moment we see the news as neutral as no bids have been placed, although 11 possible bidders suggest increased competition for utility assets in SEE region.