In a prospectus intended for the upcoming dual listing of CEZ’s shares in Warsaw, the company said that it plans to invest cEUR7b in acquisitions in the Central and South Eastern Europe by 2009 including increased leverage.
Our view: The announcement is in line with CEZ’s previous statements, based on CEZ debt capacity, free cash flow generation ability and a need to renew its ageing coal-fired power plants. Note that CEZ’s Debt/Equity in the 1H06 reached 0.33 and we estimate it to stand at 0.23 by 2009 allowing CEZ to raise additional EUR2.5bn in debt following the recent EUR500m bond issue.