Czech electricity producer CEZ has decided to participate in the privatisation of the Slovak utility Slovenske Elektrarne (SE). However, CEZ’s interest comes months after the September 2002 deadline for non-binding bids, and eight European power companies have already completed this stage. Two financial bidders are already on the sidelines ready to join with the existing strategic bidders.
The Slovak government intends to sell 49 per cent of the 100 per cent state-owned SE, although the precise structure of the sale has still to be decided. PricewaterhouseCoopers (PwC) has proposed giving bidders the option of bidding for either the conventional or nuclear parts of the business, or both, but the Slovak government has still to clear this sale model.
None of the non-bound bidders so far has expressed an interest in the nuclear part of the business. CEZ has expressed interest in both the conventional and nuclear parts of SE. This has created a problem for PwC and, ultimately, for the Slovak government if it wants to offload part of the nuclear production portfolio: how to get CEZ on board as a bidder at this late stage without offending the existing companies that made non-binding bids by the deadline.
There are several available options. One would be to allow the existing bidders and CEZ to immediately advance to make binding bids. Another option would be to give CEZ some time to read all the information on the SE sale so that it can decide if it wants to join the process and what exactly it wants to buy. Another option might be to restrict CEZ’s interests to the nuclear assets, which no-one else has expressed any interest in.
On the face of it, more electricity production capacity is not the greatest priority of CEZ, with the two units at Temelin now operational. CEZ is the second-largest exporter of electricity in Europe, and it currently exports a good proportion of its power at prices below those on the Czech market.
