CEZ

CEZ Group received six mostly local binding bids for its equity investments in Bulgaria (3CZ BU; 1CZ BU), according to media reports.

In January 2017, CEZ announced officially it is exploring sale option for its assets in Bulgaria based on investor interest.

The Company owns the biggest electric distribution company in Bulgaria – CEZ Distribution Bulgaria (3CZ BU), a wholesaler – CEZ Electro (1CZ BU), a power plant and renewables plants in the country.

Who are the bidders for CEZ assets

CEZ Group received mostly local binding bids of all its assets last week. These include Minstroy Holding (controlled by ex-Multigroup executive Nikolay Valkanov), Prista Oil (owned by the Bobokov brothers, majority owners of Monbat (5MB BU)), Hristo Kovachki, owner of power plants and Valentin Christov, owner of an energy trader. Additionally, the Czech Energo-Pro as well as the Romanian Electrica also submitted binding offers, according to Capital weekly newspaper. The paper also quotes anonymous consultants as saying the investor interest is not strong enough and whether it will lead to deal will be decided in May on a CEZ Supervisory board meeting.

An English fund and a Turkish company also submitted a bid but they did not comply with the preliminary terms of the tender, says specialized energy website 3e-news.net. The media report adds that a short list will be made after a review and then the process of negotiations will start.

Timing

Meanwhile Reuters quoted CEZ board member Pavel Cyrani  confirming the mostly Bulgarian investor interest but also adding that “no talks had begun with the country’s new government and no sale timetable had been set”. It is very important for this deal to be clear about the regulatory bodies’ decisions and the review of investment commitments.

A new government is expected to be in place after 4 May 2017.

Background

CEZ acquired 67 percent stake in the power distributor in Western Bulgaria in 2004 after placing the highest bid of 281.5 million euros in a privatisation tender, reminded Reuters. This is not the first move out of the country of a foreign company in the energy sector. In 2011 German E.On sold its assets in Northeast Bulgaria to the Czech Energo Pro for 133 million euros.

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