CEZ is selling its Bulgarian assets to a Bulgarian renewables’ company



CEZ Supervisory Board granted consent to the sale of its Bulgarian assets to local renewables company Inercom Group, the former announced in a press release on 22 February 2018.

The sale package includes CEZ’s stakes in seven companies, namely the holding company CEZ Bulgaria, trader CEZ Electro Bulgaria (1CZ BU), leading grid operator CEZ Distribution (3CZ BU), CEZ Trade Bulgaria, CEZ ICT Bulgaria, solar power plant Oreshetz and biomass gasification power plant Bara Group.

The deal value was not disclosed. However, at the end of 2017, when CEZ Group selected Inercom as an exclusive buyer, unofficial sources said that the offer price was EUR 320m. This is significantly above the fair market value of the assets sold, as determined in an independent appraisal. CEZ Group confirmed the latter, adding that the deal would bring positive return on its investments in Bulgaria.

The transaction settlement is still subject to approval by the Bulgarian anti-trust authority.

Who is CEZ assets buyer

Inercom operates 22MW solar parks in Bulgaria with a total revenue of BGN 50m. According to Bulgarian media sources, the company’s offer has been rumored to be endorsed by two local banks – First Investment Bank (5F4 BU) and the state owned Bulgarian Development Bank. However, according to Czech media, 50% of deal (EUR 180m) will be financed by two undisclosed entities with no information on assets and financial power.

CEZ history in Bulgaria

CEZ Group entered the Bulgarian market back in 2004 with the acquisition of two thirds of the shares in three distribution companies, which it later restructured into CEZ Distribution and CEZ Electro, keeping 67% stakes in each of them, with the remainder owned by minority shareholders.

Over the subsequent years, additional companies were established in Bulgaria. CEZ Electro Distribution reported flat revenue in FY2017 of BGN 1.27bn, while CEZ Distribution reported increase in revenue by 2.9% y/y to BGN 436.3m for the same period. The latter serves some 3 million customers in Bulgaria.

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