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CEZ plans to sell Bulgarian distribution, renewable assets to Inercom

EBR Staff Writer Published 23 February 2018

Czech-based electricity conglomerate CEZ plans to sell its distribution and renewable assets in Bulgaria to Inercom Bulgaria following the approval of its supervisory board.

The company expects to sign an agreement with the Bulgarian company in the next few days, although it did not disclose the transaction amount.

CEZ said that seven companies will be part of the sale which includes CEZ Bulgaria, CEZ Elektro Bulgaria, CEZ ICT Bulgaria, CEZ Razpredelenie, CEZ Trade Bulgaria, Free Energy Project Oreshetz and Bara Group.

Also part of CEZ’s sale are the Oreshetz solar power in western Bulgaria and the Bara biomass gasification power plant in southern Bulgaria.

The company revealed that it had received indicative offers for its Bulgarian assets from multiple investors in early 2017, following which it had started negotiations on the potential sale.

CEZ said that the offer from Inercom is considerably higher than the fair market value of the Bulgarian assets to be sold, and will therefore deliver it a positive return on investments.

It said: "Taking into account the sales price, the Group’s fourteen-year-investments in its Bulgarian operations yielded an overall positive return."

The sale of CEZ’s Bulgarian operations will be subject to approval from the Bulgarian anti-trust authority.

Recently, the CEZ Group sold the 1,260MW Varna fossil-fuel power plant, built near the Black Sea shore to Bulgaria-based SIGDA.

CEZ forayed into the Bulgarian market in 2004 by buying two thirds of shares in three power distribution companies. About three years later, the distribution business was separated from power supply, and the original three power distribution firms were transformed into CEZ Razpredelenie Bulgaria as the distribution business and CEZ Elektro Bulgaria as the power trading business.

Currently, CEZ Razpredelenie supplies power to nearly three million customers while CEZ Elektro Bulgaria and CEZ Trade Bulgaria sold 9.7TWh of power to end customers in 2016.

CEZ’s CEZ Razpredelenie provides electricity to around three million homes in Bulgaria. Photo: courtesy of Suriya Kankliang/FreeDigitalPhotos.net.