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CEZ Drops as Bulgaria Threatens to Revoke License: Prague Mover

February 18, 2013

CEZ AS fell for a fourth day after the Bulgarian government said it may revoke the Czech utility’s power-distribution license in the southeast European country.

The stock slid 0.5 percent to 616 koruna by 11:03 a.m. in Prague, adding to a 3 percent retreat in the previous three days. CEZ underperformed a 0.1 percent gain for the PX index.

Bulgaria will decide in several days whether a finding by a regulator that CEZ violated public-procurement rules is enough to revoke the company’s license, the Sofia-based Energy, Economy and Tourism Ministry said on its website yesterday. CEZ had 9.9 percent of its 2011 revenue from Bulgaria, making it the company’s second-biggest market after the Czech Republic.

“The loss of license is equal to the loss of business,” analysts led by Milan Vanicek and J&T Banka AS in Prague wrote in a report to clients today.

Separately, Czech police have been inquiring into CEZ business deals, including the 2012 sale of a stake in coal company Mibrag, Barbora Pulpanova, a company spokeswoman, said in e-mailed comments today, confirming a report in the Mlada Fronta Dnes newspaper.

CEZ shares have dropped 9.4 percent in 2013, compared with a 3.4 percent decline by the PX index, according to data compiled by Bloomberg. The yield on CEZ’s 2021 Eurobonds fell three basis points today, or 0.03 percentage point, to 2.56 percent, the least since Jan. 25, the data show.

To contact the reporter on this story: Krystof Chamonikolas in Prague at

To contact the editor responsible for this story: Wojciech Moskwa at

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