‘Unwise’ To Split Up CEZ Group: Trade Minister Huner

Andrej Babiš, CEZ, Czech Republic

Prague, March 23 (CTK) – Splitting up energy utility CEZ due to the planned construction of a new nuclear source would be unwise, as it is necessary to assess its impacts on shareholders first, Industry and Trade Minister Tomas Huner said in today’s issue of daily Hospodarske noviny (HN).


In addition, the preparations for a split-up, including a drafting of expert opinions, would be very costly. “And would I do that when I do not even know whether I will build a nuclear source?” Huner said.


Prime Minister Andrej Babis supports the idea of CEZ financing the construction of a new nuclear unit.


Such a step could, however, damage minority shareholders, which is why a potential splitting up or transforming of CEZ started to be discussed.


The government is the majority owner of CEZ, holding about 70 percent of its shares via the Finance Ministry.


CEZ has assessed six scenarios of the split-up, with the most preferred one involving the state fully owning its nuclear, coal, mining and business parts. The “new CEZ”, in which the state would retain 51 percent in the first stage, would cover distribution, sale, renewable sources and the ESCO energy services.


“I do not understand why distribution would not be needed in the “old” CEZ, why it should include only coal and nuclear sources. This has to be assessed in detail,” Huner said.


Babis said on Monday the government has to see to it that, apart from production, the state keeps strategic activities like trading and distribution.


CEZ CEO Daniel Benes told daily Mlada fronta Dnes (MfD) today that CEZ does not plan to make a split-up that would cause the state to lose control over the company.


“We are not considering even losing the state’s majority in any part of CEZ. But we have not selected one option yet,” Benes said.


A split-up of CEZ is not the only possibility being considered with regard to the financing of a potential new nuclear block. The construction could also be secured by a subsidiary of CEZ. Another option involves the state buying a subsidiary of CEZ, following which the company would be responsible for the construction.


CEZ saw its net profit rise by 30 percent year-on-year to Kc19bn last year, while its sales dropped by 1 percent to Kc201.9bn.