PRAGUE, March 31 Czech utility CEZ
said on Friday it would buy back nearly all its 2017 convertible
bonds linked to MOL shares while selling most of its
7.5 percent stake in the Hungarian oil and gas group to pay the
CEZ said it would raise 141.4 billion forints ($490 million)
from the sale of MOL shares to investors.
CEZ is ending a relationship dating back to 2008 when it
bought the shares to help MOL fight off a takeover attempt by
Austria's OMV. It will retain only about 0.1 percent of MOL
The deal almost a decade ago was originally intended to seal
a strategic tie-up of the two central European energy firms, but
plans to build gas-fired power plants were later shelved. CEZ
put the shares into a convertible bond in 2014.
CEZ had launched an offer for the 470.2 million euro bond
this week and said on Friday it had received 463.1 million euros
($494.6 million) of the bond by deadline.
CEZ said it would place 7.56 million MOL shares with
investors after conditionally selling shares in a bookbuilding
process this week at a price of 18,700 forints per share.
Shares in MOL fell 1.9 percent to 19,840 forints in early
trade while CEZ shares were steady at 439.90 crowns at 0713 GMT.
CEZ had said on Thursday that if all bondholders had
tendered their bonds, it would boost its 2017 pre-tax income by
3.4 billion crowns ($133.7 million).
Settlement of both the share placing and bond re-purchase
will occur on around April 4, CEZ said. Barclays Bank, Citigroup
Global Markets Limited and Deutsche Bank coordinated the deals
while Citigroup is the settlement agent, it said.
CEZ said last week it expected adjusted net profit of 12
billion to 17 billion crowns for the full-year 2017, with the
higher end of that range including income if convertible
bondholders redeemed the paper for shares instead of cash.
Analysts have said, with the deal this week buying back the
bonds with cash, that profits could fall somewhere in upper half
of that range.
($1 = 288.7700 forints)
($1 = 0.9363 euros)
($1 = 25.4250 Czech crowns)
(Reporting by Jason Hovet; Editing by Keith Weir)