12 Mar 2002 – The sell-off of Czech power company CEZ, responsible for 65 per cent of the country’s electricty production, will be cancelled, the cabinet decided on Monday. Instead, the state-controlled group will undergo an asset restructuring to help it face domestic competition., Finance Minister Jiri Rusnok said.
A bidding process for a 68 per cent stake in CEZ failed to attract anyone willing to meet both the strict sale conditions and the reserve price established by the Czech governemnt. A minimum price of 200bn crowns ($5.5bn) proved too much for the foreign power groups who had been attracted by the prospect of acquiring CEZ assets.
Electricite de France came closest but were not prepared to accept all the conditions including coal purchase deals. Others were unwilling to take on the controversial Temelin nuclear power plant as part of the CEZ package, which as well as generating assets included stakes in eight regional distribution companies.
The proposed restructuring will involve the state buying a 66 per cent stake in the national grid transmission system in exchange for mostly majority holdings in the regional power distribution companies. The stakes will be independently valued which are estimated at around 10-15bn crowns.
The latest plans by the state have not been well received by several western European energy firms who have built up large stakes in the distributors.