According to Romanian privatization agency (AVAS) CEZ is one of the eight companies interested in building a new power plant in eastern Romania for the state own Termoelectrica. The winner of the tender should establish join-venture with Termoelectrica and would have the majority in the partnership. The other participants include: E.ON, Enel, Electrabel, AES, Iberdola and two Romanian companies Rommed and Romenergo.
Our view: CEZ’s strategy is to become the energy leader in CEE and SEE region, thus Romania belongs to CEZ’s target countries and CEZ already participates a couple similar tenders. We will wait with evaluation till more information are released or short-listed companies are announced. We reiterate our Buy recommendation for CEZ and fair value of the CZK 1,075.