Prague - Czech semi-state energy company CEZ has de facto agreed to sell its Chvaletice power plant to the EPH energy and industry holding
EPH is owned by Daniel Kretinsky and the PPF and J&T investment groups.
The holding will probably get Chvaletice with a three-year contract for supplies of brown coal from the Severoceske doly mining company. This equals roughly six million tons of coal.
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"The final price of the power plant depends on the size of the coal supply contract. But there are several different variants in play," said a source close to the negotiations.
EPH is estimated to pay more than two billion koruna (approximately EUR 80 million) to CEZ.
According to experts, coal supplies are actually more important to EPH than the Chvaletice power station.
CEZ spokesman Ladislav Kriz confirmed that EPH is the only company that has get through to the second round of the bidding process to sell Chvaletice.
"I can confirm that negotiations with CEZ about Chvaletice are ongoing. But I definitely do not expect the final decision to be made in the following few days," Kretinsky told Aktualne.cz.
Sources from both CEZ and EPH say that the deal is de facto arranged. Both sides are currently waiting for the European Commission (EC) to give it the green light.
Four years ago, Brussels started an anti-monopoly trial against CEZ after it had received a complaint from Czech Coal, a brown coal company owned by Pavel Tykac.
In December 2012, CEZ and Czech Coal agreed to prepare a new long-term contract for coal supplies from Tykac's mines for the CEZ-operated Pocerady plant. Tykac is now ready to withdraw his complaint with the EC.
The Chvaletice deal is supposed to compensate Kretinsky, because the planned deal between CEZ and Czech Coal will bring higher coal prices.
EPH operates heating plants in Komorany and Plzen and a large power plant in Opatovice. With higher coal prices, it will be very difficult for the holding to prevent its electricity generation profits from plunging. The Chvaletice deal buys EPH some time to consolidate its energy operations.
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