An advisory committee to the Czech government has recommended the scraping of the country’s sale of power utility CEZ as bids have, for a second time, failed to meet expectations.
A meeting of the cabinet today will decide whether to postpone the sale until after the next election. The government had been keen to see through a process started by the previous administration and seen as an important step for the post-communist regime in its attempt to gain EU accession.
The two remaining bidders were Electricit�e France (EdF) and Enel of Italy supported by Spain’s Iberdrola. This followed the withdrawals of Electrabel, International Power and EON, all of which objected to the strict sale terms. A principle objection was the inclusion of nuclear assets which the Czech’s would not separate and against which no guarantees were given.
EdF’s bid was reportedly increased to more than 200bn crowns ($5.53bn) which is at a level which the Czech government have said is acceptable. The bid was contingent on contractual changes and is therefore likely to be disqualified.
Enel, the Italian power utility has bid about 136bn crowns – well short of the 200bn crowns demanded by the Czech government.
A 67.6 per cent stake in CEZ is being sold along the national grid and government stakes in six regional distributors.
Foreign exchange dealers have been watching developments closely and optimism that the country was to benefit from a considerable influx of privatization revenues had pushed the crown higher. But news of the possible collapse pushed the crown down against the Euro on Monday.