EK completed investigation by CEZ sale Chvaletice
The European Commission (EC) has completed investigations CEZ. The company sold a power plant Chvaletice 800 MW and it is according to the EC sufficient reason to terminate the proceedings, which began in 2009 and involved the possible abuse of a dominant position. The negotiated terms of the completion of the investigation informed ČEZ year ago. Completion of the investigation, according to our opinion, expected and already reflected in the share price.
Commission accepted three possible scenarios: Sale of plants Počerady, Chvaletice or combined sales of power Melnik with yew. ČEZ sale carried out under the supervision of an observer to verify that the transaction will not cause new concerns about the competitive environment. The buyer will have to
be approved by the European Commission (Bloomberg).
Approval of the agreement by the EC was more or less expected, but is positive in terms of dissipated uncertainty. CEZ has already made a deal to sell coal-fired power plant Chvaletice Litvínovská for 4.12 billion CZK (7.7 CZK / share) and said that the sale is recognized accounting profit of about 2.0 billion CZK. We estimate that by Chvaletice
without the inclusion of free CO2 allowances allocated to EBITDA CEZ in 2013 yielded less than 0.5%. The selling price was in line with our estimate.
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