CEZ sells MOL stake

By bne IntelliNews March 30, 2017

CEZ has “conditionally” sold its 7.5% stake in Hungarian oil and gas group MOL, the Czech state-controlled energy group announced on March 30.

The report follows CEZ's launch of a buyback of bonds convertible to MOL stock the previous day. The Czech group announced the effort to sell the 7.65mn shares in MOL at the same time. The deal should boost 2017 profitability, with CEZ facing pressure from the finance ministry to raise dividends.

The final placement price for the shares, which was made via a bookbuilding process, was HUF18,700 each. That suggests preliminary proceeds of around HUF143.1bn (€462mn).

The proceeds will be used by CEZ to fund the buyback of €470.2mn worth of the convertible bonds, the company said. Pre-tax profit in 2017 will enjoy a boost of CZK3.4bn (€126mn) should the full volume be acquired, CEZ estimates.

The deal “is in line with the previously announced net profit guidance of CZK 12bn-17bn, where the wide range took into account the possibility of the sale of the stake in MOL,” point out analysts at J&T Bank. “Of course, a higher expected net profit gives a solid chance of the continuation of an interesting dividend. We consider the transaction positive with respect to the timing too because MOL’s shares are currently at a six-year high.”

CEZ bought the MOL stake in 2008 as the Hungarian company, in which Budapest holds around 25%, fought off an attempted takeover. A strategic tie-up of the Central European energy giants was envisaged, but has come to naught. The shares were rolled into 3.5 year bonds in 2014, when MOL declined an opportunity to buy them back.

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