Home Bulgaria Business Czech CEZ Reportedly Sues Bulgaria over Banned Asset Sale

Czech CEZ Reportedly Sues Bulgaria over Banned Asset Sale

Bulgaria Business 2018/08/09 at 7:30 AM
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Czech energy company CEZ has filed an administrative claim against the Bulgarian competition watchdog, CPC, over a ban on selling its assets in Bulgaria to the local firm Inercom Group, Investor.bg reported on August 7.

In July, the CPC ruled that the highly controversial deal cannot be completed as Inercom would gain excessive power on the photovoltaic electricity market. At the time, local analysts suggested that the decision of the antitrust body had no serious grounds, and aimed to put an end to the major political dispute around the sale of CEZ’s assets to an unknown company furthermore controlled by owners related to the minister of energy.

According to CEZ, the decision by the CPC is “inadequate” and the company has decided to challenge it. At the end of July, Inercom also appealed to the Supreme Administrative Court (SAC) over the decision.

When CEZ announced in February that it had selected the family-owned Inercom as the buyer of its Bulgarian assets, serious concerns arose about its ability to fund and run the assets. Adding to the controversy, Inercom was also found to be owned by a close friend of Bulgaria’s energy minister.

The deal became a major political scandal and has further destabilised the already unstable ruling coalition. All the main political parties are using it as a tool to gain popularity and reduce support for Boyko Borissov’s third government. Borissov himself is trying to calm down the situation and show that the government can and will control the situation and would not allow the sale to harm the interests of consumers.

Meanwhile, days after CPC announced its decision not to allow the deal, Bulgarian media reported that CEZ could resume negotiations with India Power Corporation — the next in line after Inercom according to the outcome of the auction for the assets’ sale. CEZ had shortlisted five companies in the sale procedure for its assets in Bulgaria.

The Indian company is part of Kanoria Foundation Trust, which unifies the businesses of the Kanoria family. Unlike Inercom it is a large concern; its value is estimated at $10bn. India Power produces wind, solar and thermal energy, and also deals with electricity distribution.

In Bulgaria, CEZ operates an electricity distribution business with 2mn customers, a retail electricity supplier, and a wholesale trader. The Varna coal-fired power plant also owned by the firm has an installed capacity of 1,265 MW. In addition, it owns two renewable plants.

Intellinews, by Denitsa Koseva

Source : Novinite | Photo credit : Google

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