(Adds further company comment, minister comment, Europe
PRAGUE Feb 3 Czech electricity producer CEZ
could split into two parts in the future, one
responsible for enlarging nuclear power plants, and the other
focusing on new sources of energy, Chief Executive Daniel Benes
told Lidove Noviny newspaper.
European utilities have struggled as a result of weak
wholesale electricity prices, forcing some such as German groups
E.ON or RWE to hive off healthier parts of
CEZ's profits have declined since the global economic crisis
of 2008-09 and it has been making a push into renewable and
other new energy businesses while also selling older coal-fired
plants and focusing on upgraded units.
It is also looking to expand its nuclear power fleet but has
run into financing issues after failing to secure price
guarantees from the state, its 70 percent owner.
Benes told Lidove Noviny that talks with the government on a
possible future structure of CEZ, central Europe's largest
listed utility, were only just starting.
"Either we find a compromise and we will fulfill all the
targets in an optimal way, or the shareholders come to a
conclusion that it is better to follow the path on which the
company could split for example," Benes was quoted as saying in
the article published on Friday.
"This debate with politicians is only just beginning and it
is not clear at all, how it will end."
A CEZ spokesman said there was no time frame yet.
"We have presented possibilities to them (government)... it
can even stay as it is now, eventually," spokesman Ladislav Kriz
Talks on CEZ's future shape could take more than a year
based on the German experience. Komercni Banka analysts said
they did not expect any decisions before national elections in
Benes cited RWE and E.ON as one model and said the state
could hold a smaller majority stake in the new energy business.
Industry Minister Jan Mladek, a member of Social Democrat
party, supported the idea of a split, according to the paper.
Finance Minister Andrej Babis, whose ministry controls the
state's holding in CEZ and who is leader of the ANO party that
looks on course to win in the October elections, did not answer
the paper's request for comment. Babis has said in the past CEZ
should finance its nuclear power expansion.
CEZ cancelled a multi-billion dollar tender to enlarge its
Temelin nuclear power plant in 2014 because of financing risks
after the government refused to provide power price guarantees.
Both CEZ and the state are looking to expand the country's
existing nuclear plants in the future but have not yet agreed on
how to finance this.
(Reporting by Robert Muller Writing by Jason Hovet. Editing by