CEZ starts exclusive talks with Bulgaria’s Eurohold on sale of local assets

By bne IntelliNews April 17, 2019

Bulgarian financial and insurance group Eurohold said on April 17 it has been granted exclusivity for the acquisition of local assets of Czech energy company CEZ. The company also confirmed that plans to pay for the acquisition with its own funds and loans from banks located in Western Europe, responding to rumours that it might use Russian funding.

In February 2018, CEZ announced it had selected local family-owned firm Inercom as the buyer of its Bulgarian assets, which raised serious concerns about the Bulgarian company’s ability to fund and run the assets. Adding to the controversy, Inercom was also found to be owned by a close friend of Bulgaria's energy minister.

However, in July, the competition watchdog CPC ruled that the highly controversial deal could not be completed as Inercom would gain excessive power on the photovoltaic electricity market. At the time, local analysts suggested that the decision of the antitrust body had no serious grounds, and aimed to put an end to the major political dispute around the sale of CEZ's assets to an unknown and politically connected company. Appeals by CEZ and Inercom were rejected.

Earlier in April, CEZ terminated its agreement with Inercom.

Eurohold also said it will bid for the assets on its own, without adding other companies to the deal as reported earlier by Bulgarian media.

“The intention to acquire CEZ Group’s assets in Bulgaria is part of Eurohold’s long-term strategy to enter new regulated business segments that offer big growth opportunities,” the company said in the press release.

In Bulgaria, CEZ operates an electricity distribution business with 2mn customers, a retail electricity supplier, and a wholesale trader. The Varna coal-fired power plant also owned by the firm has an installed capacity of 1,265 MW., and was recently acquired by Ahmed Dogan, the chairman of honour of Bulgaria’s ethnic-Turk Movement for Rights and Freedoms (DPS). In addition, CEZ owns two renewable plants.

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