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3CZ - CEZ Distribution Bulgaria AD News Story

BGN256 4.0  1.6%

Last Trade - 15/01/21

Sector
Utilities
Size
Small Cap
Market Cap £224.3m
Enterprise Value £239.6m
Revenue £170.9m
Position in Universe 146th / 638

Bulgarian PM urges central bank, intelligence service to look into energy deal

Tue 27th February, 2018 6:25pm
By Tsvetelia Tsolova and Angel Krasimirov 
    SOFIA, Feb 27 (Reuters) - Bulgaria's prime minister urged 
the central bank and intelligence service on Tuesday to look 
into the purchase of key energy assets by a little known local 
company, denying any involvement in or backing for the deal.  
    Czech utility CEZ  CEZP.PR  signed a contract on Friday to 
sell a power distributor that provides electricity to over three 
million Bulgarians along with other assets to small Bulgarian 
solar energy producer Inercom.  urn:newsml:reuters.com:*:nL8N1QD3QF 
    The deal prompted concerns across the political spectrum 
that strategic energy assets in the European Union country were 
passing into the hands of owners about which little was known.  
    In an emotional briefing to parliament, Boyko Borissov said 
neither he nor the government were "participating in a dark, 
behind the scenes, deal." 
    "Not only are we not participating, we have no influence 
whatsoever on it," he told reporters. 
    Inercom, with assets worth around 100 million levs ($63 
million), is set to acquire a business with annual turnover of 
about 1.8 billion levs ($1.1 billion) that operates one third of 
the Balkan country's power grid. 
    The deal, estimated to cost about 320 million euros ($392 
million), is pending approval by Bulgaria's anti-trust 
regulator. Inercom has said it will be financed by bank loans, 
but has declined to elaborate.     
    Energy prices are politically sensitive in the EU's poorest 
member state, and a spike in electricity bills in 2013 toppled 
Borissov's first government. He conceded the current furore was 
reminiscent of this, but said he would not step down. 
    Borissov said he had received confidential documents on the 
deal from his Czech counterpart Andrej Babis that showed the 
involvement of Russian-Georgian offshore companies, as well as 
Russian and Bulgarian banks. 
    Borissov said Bulgaria did not have a mechanism to stop a 
deal between two private entities, but pledged to use all state 
resources to provide transparency over the deal and urged state 
institutions to step in. 
    He also suggested he might not accept the resignation of the 
energy minister, who decided to step down over links with 
Inercom's owners to try to assuage any doubts of government 
influence on the deal.    
    On Friday, opposition Socialists demanded the sale be 
stopped and urged the government to bid in a new sale process.  
    Borissov, who has previously dismissed Socialists' calls for 
the state to buy back private energy assets, said the government 
was considering legal changes that would allow the state to have 
a say in similar deals. 
    Austria's EVN  EVN.VI  and Czech firm Energo-Pro control 
Bulgaria's two other energy distributors.  
    ($1 = 1.5973 leva) 
    ($1 = 0.8171 euros) 
 
 (Editing by Mark Potter) 
 ((angel.krasimirov@thomsonreuters.com; +359 888 695 510)) 
 
Keywords: BULGARIA CEZ/SALE
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