CEZ says talks with Czech Coal in final stage, deal seen within weeks.

By bne IntelliNews February 25, 2013
Czech energy producer CEZ, which has for months holding talks with miner Czech Coal on a new long-term supply deal for its Pocerady plant, said negotiations are in their final stage and a deal will likely be signed within two weeks, CTK news agency reported citing CEZ spokesman Ladislav Kriz. According to a report by Hospodarske Noviny, the deal will be for a period of 30 to 50 years and will be for the supply of coal valued at CZK 200bn (EUR 7.8bn). Under the new agreement, CEZ will pay CZK 39 per gigajoule for the coal to be supplied by Czech Coal's Vrsany mine. The previous supply contract between the two companies expired at end-2012 and the uncertainly over future deliveries prompted CEZ to consider selling the 1,000MW Pocerady plant, which is one of its most profitable plants. According to Hospodarske Noviny, the new agreement between CEZ and Czech Coal will also have a clause providing that the two companies do not challenge each other at court and end all disputes. According to earlier media reports, Czech Coal offered to buy Pocerady for CZK 16bn but CEZ turned down the offer considering it too low. If CEZ reaches a deal with Czech Coal for the Pocerady plant, the power producer will most likely renegotiate its agreement with the EC in order to exclude the plant from the divestment list. In 2012, CEZ invited bids for five coal-burning power plants, including Pocerady, as it is seeking to put an end to a long-running EU investigation over allegedly restricting rivals from entering the market.

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