CEZ Energy’s Sale Of Bulgarian Assets To Inercom Questionable

Andrej Babiš, CEZ, Czech Republic, Miloš Zeman

Prague, Feb 28 (CTK) – Bulgarian Prime Minister Boyko Borisov called Czech Prime Minister Andrej Babis on Tuesday in regard to CEZ energy group selling its Bulgarian assets, Babis told journalists today, denying sending Borisov documents on the issue.


Borisov said he had received confidential documents from Babis stating that Russian-Georgian companies based in tax havens as well as Russian and Bulgarian banks are involved in the transaction, according to Reuters agency.


On Friday, CEZ signed a contract on the sale of its Bulgarian assets, including electricity distributor providing services for over three million people, with Inercom, a small solar energy producer.


The transaction caused worries across the Bulgarian political sphere about strategic energy assets of an EU member being owned by a little-known company.


The Czech state holds roughly 70 percent of CEZ via the Finance Ministry.


Babis said he had explained to Borisov how the transaction was conducted from the Czech Republic’s point of view.


“We did not like the sale much from the beginning, however, we have been assured several times via the Finance Ministry that the company is transparent and that the money is transparent, based on which CEZ’s supervisory board voted,” Babis said.


It is necessary for the Finance Ministry to ask CEZ via its supervisory board for reaction to the current situation, Babis said.


Babis did not comment on having confidence in CEZ’s head Daniel Benes today.


Babis talked about a team of experts to discuss possible split-up scenarios with CEZ leadership again. He said that the team should be created by the middle of March.


Bulgaria’s Energy Minister Temenuzhka Petkova resigned because of the transaction as she is suspected of being linked to Inercom owners.


The Bulgarian government has denied interfering in the deal. Over the weekend, Borisov ordered authorities to thoroughly investigate the sale.


CEZ’s supervisory board and board of directors had dealt with the sale of Bulgarian assets for a few months, and the favourability of the deal was confirmed by external expert opinions, CEZ spokesman Ladislav Kriz told CTK on Tuesday.


Inercom has provided irrevocable bank guarantee for the purchase price, which proves it is ready to finance the transaction, Kriz said.


The guarantee was issued by UniCredit Bulbank, part of the renowned international bank, Kriz stated.


CEZ entered the Bulgarian market at the end 2004. The sale concerns CEZ Bulgaria, CEZ Elektro Bulgaria, CEZ Razpredelenie, CEZ Trade Bulgaria, CEZ ICT Bulgaria, Free Energy Project Oreshetz and Bara Group.


The Czech energy group decided to leave the country because of long-lasting disputes with local authorities.