CEZ Energy Group has completed the sale of its Bulgarian assets, and the buyer, the Bulgarian financial company Eurohold, paid it 335 million euros (about 8.6 billion crowns). CEZ spokesman Ladislav Kriz said this today.
Kříž stated that the now completed sale includes seven Bulgarian companies of the ČEZ Group: CEZ Bulgaria, CEZ Elektro Bulgaria, CEZ Razpredelenie Bulgaria, CEZ Trade Bulgaria, CEZ ICT Bulgaria, Free Energy Project Oreshets and Bara Group. He reminded that ČEZ’s departure from Bulgaria began in 2017 with the sale of the decommissioned Varna coal-fired power plant.
According to Kříž, CEZ’s total income from sales of Bulgarian assets thus exceeded ten billion crowns, and the group is leaving Bulgaria with a positive cash balance exceeding one billion crowns. “In addition, the settlement of the sale has no impact on the independently running international investment arbitration against the Bulgarian state. For ČEZ and its shareholders, the arbitration claim therefore represents an additional potential return, “said Tomáš Pleskač, a member of the ČEZ Board of Directors, today.
CEZ is suing the Bulgarian state for non-compliance with the conditions to which it committed itself during privatization and the obligations that the country set in relation to the energy market upon its accession to the European Union in 2007. According to the energy company Bulgaria electricity abroad and overall market liberalization. It also prevented the company from greening the power plant in Varna, which CEZ subsequently shut down. The arbitration claim was recently registered by the International Center for the Settlement of Investment Disputes in Washington, DC (ICSID).
CEZ entered the Bulgarian market in 2004, at the same time as the Austrian EVN, the German E.ON and other European energy companies, which began investing in the country with the expectation that the energy market would be liberalized. CEZ purchased part of the Bulgarian distribution system, and in 2006 it bought a power plant in Varna. However, after disputes with the Bulgarian authorities, he decided to leave the country, and activities in the country are gradually being reduced or terminated by other foreign energy companies.
CEZ’s expansion into the Balkans has been repeatedly described as unsuccessful by Prime Minister Andrej Babis (YES). The majority owner of ČEZ is the state, which owns 70 percent of the company’s shares through the Ministry of Finance. At the end of March this year, ČEZ also completed the sale of its assets in Romania. The company did not state the price, analysts previously estimated that ČEZ received 25 to 30 billion crowns for the sale. Sales are in line with CEZ’s new strategy, approved the year before. It envisages the gradual sale of assets in Bulgaria, Romania, Turkey and Poland. An exception is companies focused on modern energy services (ESCO), which ČEZ wants to develop at home and abroad.
The acquiring company Eurohold Bulgaria AD is the largest Bulgarian publicly traded company and its shares are traded on the Sofia and Warsaw stock exchanges. Eurohold is headquartered in Sofia, a subsidiary of the group operating in the field of insurance, leasing, car sales, asset management and investment services in 12 European countries.