The Privatisation Agency (PA) launched negotiations on February 22 with the Czech company CEZ for the sale of the thermal power plant (TPP) in Varna, on the Black Sea.
The surprising move came as a result of the failed talks with Russias energy major RAO United Energy Systems (UES), which was the winner in the tender for the privatisation of Varna TPP.
CEZ, which was ranked second in the tender held in May 2005, offered 285.2 million euro in cash and investment for the 1260-megawatt power plant. RAO UES then offered the highest price of 579 million euro, but later withdrew its offer, considering it too high. Italys Enel was third in the bidding.
Varna thermal power plant will give us a better position in the future liberalised market, Tomas Huner, CEZ country manager for Bulgaria, told the media on February 23.
He added that the Czech utility company was prepared to start negotiations immediately after receiving the invitation from the PA in Sofia and expressed hope that the talks would be successful for both parties.
CEZ already bought three electricity distribution companies (EDCs) in Bulgaria from the state in 2004, paying a total of 281.5 million euro.
Huner also said that CEZ was ready to open talks for the purchase of a 400-megawatt coal-fired plant in city of Rousse, on the Danube. CEZ placed the second-highest offer after RAO UES in the tender for the sale of that power plant and local heating utility in 2005.
However, the PA executive director already shattered their hopes for the Rousse utility, saying the agency would not invite the Czech company for negotiations.
The Czech state-owned CEZ is ready to bid for dominance of South East Europes power grids and is poised to take part in any privatisation tender that might emerge from the ex-communist states in the region. This statement by the companys head of mergers and acquisitions, Vladimir Schmalz, was quoted by SEE News on February 23.
We are carefully monitoring all the opportunities in the region. CEZ has enough financial sources to participate in all the possible future privatisation processes in the region, Schmalz said in an interview with SEE News from Prague.
CEZ said in January it might borrow about 500 million euro in eurobonds this year to back up acquisition plans for Central and Eastern Europe. The company has previously said it would rely on three billion euro of its own resources for takeover plans through 2010.
