Czech Coal AS offered 16.5 billion koruna ($831 million) for CEZ AS (CEZ)’s 1,000-megawatt Pocerady coal- fired power plant as it seeks to expand into electricity production.
The actual amount paid will depend on whether carbon credits are included in the sale, Czech Coal spokeswoman Gabriela Benesova said in a telephone interview today from Prague. The deadline for CEZ’s decision is the end of the year.
“Our offer is very attractive,” Benesova said. “It includes several alternatives depending on what kind of package CEZ offers.”
Czech Coal, which is competing for the plant with utility Energeticky a Prumyslovy Holding AS, also wants Pocerady because it is located next to its Vrsany coal mine in the north west of the Czech Republic. CEZ and Czech Coal are in dispute over the price of coal the miner supplies to the utility. The long-term contracts for coal supply to Pocerady expire at the year end and CEZ claims the price Czech Coal is asking to renew the contract is too high.
“Czech Coal has warned it will stop supplying Pocerady after the current contracts run out at the end of the year,” Bohumil Trampota, an analyst at J&T Banka AS in Prague, wrote today in a note. “If CEZ decides not to sell Pocerady, it will have to ramp up production in its own coal mines in Northern Bohemia and transport the coal to the plant.”
CEZ shares were down 1 percent to 671.7 koruna at 12:41 p.m. in Prague. The stock has lost 14.5 percent of its value this year.
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