Czech Industry minister: CEZ split idea, a nonsense

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The idea of splitting state-controlled Czech utility CEZ is nonsense and would present several problems, Industry Minister Tomas Huner was quoted as saying.

CEZ, with a market capitalisation of $13.2 billion, has been looking at ways to raise shareholder value by separating regulated assets such as renewable energy and distribution from traditional production in lignite and nuclear plants.

A plan under consideration would give the government, which holds a 70 percent stake in CEZ, full control of the traditional energy business and allow it to proceed with construction of a new nuclear power plant that CEZ has refused to undertake as a private enterprise without state guarantees.

Some minority shareholders have also been opposed to taking on the nuclear plant project, according to Reuters.

“I think the split (of CEZ) is silly,” Huner said in an interview with the Hospodarske Noviny daily. “We can talk about splitting the firm once the impact on shareholders has been calculated.”

Huner said he did not understand why distribution would not be included with coal and nuclear assets and added that it remains unclear whether the proposed reorganisation is the best option to finance new nuclear capacity.

In a separate interview with newspaper Mlada Fronta Dnes on Friday, CEZ Chief Executive Daniel Benes said the company was looking for solutions that would benefit all shareholders.

“We can, for example, internally separate assets to address investors who will want to invest into a modern, innovative energy firm but not in coal-fired plants,” Benes said.

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