PRAGUE. FEBRUARY 28. INTERFAX CENTRAL EUROPE - The Czech government has plans to privatize its controlling stake in dominant power utility CEZ but no timeline has been set, Deputy Industry and Trade Minister Tomas Huner (Civic Democrat, ODS), a CEZ supervisory board deputy chairman, told reporters Wednesday.
"[The privatization of CEZ] is just a matter of time," Huner said on the margins of the 7th Czech Energy Congress.
The government, which now controls a 67.6% stake in the power utility, is looking to sell a CEZ minority stake of 5-7%, expected to fetch more than CZK 30 bln. The cash would go to the state highway infrastructure fund (FDS).
Huner added that the exact timing of an eventual privatization (the state relinquishing majority control) will depend on how long CEZ management is able to prove to the government that CEZ's current rapid foreign expansion is earning more for the state than it could cash in for a potential privatization.
CEZ, considered the most profitable power utility in Central Europe, acquired Bulgarian electricity distribution companies Stolichno, Sofia oblast and Pleven in 2004. In 2005 CEZ acquired Romanian distribution company Electrica Oltenia in power plants Elcho, as well as Poland's Skawina and Bulgaria's Varna power plant in 2006.
The expansion has boosted the company among regional market leaders, but its growth potential is limited, according to Huner.
"[CEZ] will never reach the level of other countries' national champions, such as [Germany's ] E.ON or RWE, [France's] EDF or [Italy's] Enel," he said.
The share of foreign assets in CEZ's overall earnings before interest, taxes, depreciation and amortization (EBITDA), increased more than 2.4 times [to CZK 4.7 bln], according to company CEO Martin Roman, and will continue to grow in the future.
CEZ upped its net profit by 29% year-on-year (y/y) to CZK 28.8 bln in 2006 and set its last year's dividend in the range of 40% to 50% of net profit.