According to yesterday’s Polish daily Rzeczpospolita, CEZ may acquire small stake in heating company PEC Katowice as a debt/equity swap. PEC Katowice buys part of distributed heat also from Elcho plant, which CEZ acquired earlier this year, but is not paying for it. Therefore PEC Katowice proposed 6% stake in company for its debt of USD 9.3m to CEZ. However CEZ reportedly requires some 12 % stake.
Our view:
As this news came out yesterday and relates only to marginal issue we don’t think to have any trading impact today. After consultation with CEZ, we see good match of PEC Katowice with Elcho as they both distribute heat in the region and furthermore CEZ’s claim would thus be solved.