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INTERVIEW-CEZ holding out for better price in Bulgarian asset sale
September 26, 2017 / 6:01 PM / in 21 days

INTERVIEW-CEZ holding out for better price in Bulgarian asset sale

PRAGUE, Sept 26 (Reuters) - Czech utility CEZ has shortlisted five bidders for the sale of its Bulgarian assets and wants to decide on a deal by the end of year or scrap it if it cannot secure the right price, a board member told Reuters.

Tomas Pleskac did not disclose the name of the bidders, saying only they had experience in the Balkans power sector.

CEZ could sell all of the assets - including an electricity distributor, a coal-fired power plant and renewable energy facilities - as a package or in parts, he said in an interview on Tuesday.

The company is exiting Bulgaria after long-running disputes with the authorities there and as it concentrates on the Czech and central European markets and a push into renewables, mainly in Germany and France where there are more opportunities.

Pleskac said three bidders sought the whole package of CEZ’s Bulgarian assets; one bidder wanted only the 1,265 MW coal-fired plant Varna; and another was looking at all the assets except the Varna plant, which is offline and requires upgrades to meet European Union regulations.

Bulgarian and Czech media have reported that CEZ has been unhappy with bids for its Bulgarian assets, and Czech financial daily Hospodarske Noviny reported last week that Czech energy group Energo-Pro had sweetened its offer for the distribution assets to over 300 million euros ($353 mln).

Pleskac said CEZ would continue discussing prices with bidders, along with other conditions.

“We are continually closing the gap with our expected price and what bidders are offering,” he said. “I believe (price talks) will continue. If it does not continue, then a sale will not happen.”

CEZ began testing market interest in January for its Bulgarian operations.

“We would like to close everything by the end of the year,” Pleskac said. “That means getting to a point where we have a good offer on the table that we are prepared to sign, or end the sale process.”

CEZ and other foreign energy firms have had long-running disputes with Bulgarian authorities over issues like prices and in 2016 the company launched arbitration against the government, seeking hundreds of millions of euros for failure to protect its investments.

Pleskac said after the Bulgaria sales, CEZ had no plans to sell Romanian or Turkish assets but would consider any good offers. ($1 = 0.8498 euros) (Reporting by Jason Hovet and Petra Vodstrcilova; Editing by Michael Kahn and Susan Fenton)

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