According to CIA news agency, CEZ is asking Bulgaria for EUR8.8m or CZK0.4 per CEZ share in compensation for shortcomings in the three distribution companies it acquired in January 2005. CEZ seeks EU3m in relation to an illegal software used by the distribution companies and further EUR5.8m for inaccurate financial statements in the three distributors prior to the privatization.
Our view: Given the fact that the total sum of EUR8.8m or CZK0.4 per CEZ’s shares we do not see the news as market moving. In addition, we believe that CEZ took into account shortcomings of this character when making acquisition in the region.