Czech electricity
company CEZ AS (BAACEZ.PR) Wednesday said it aims to make a final
decision by the end of this year whether it will build a gas-fired
power plant in Hungary and sell its troubled Albanian electricity
distribution unit.
CEZ has invested roughly 120 million
euros ($155 million) in its Albanian unit, but due to ongoing
regulatory and commercial hurdles the company posted a first-half
2012 loss on earnings before interest, tax, depreciation and
amortization, or Ebitda, of 2.3 billion koruna ($119 billion).
"In
Albania there are two main problems, the level of [electricity theft]
from the network and [lack of]creditworthiness of customers,"
said Tomas Pleskac, CEZ board member and head of international
business. He added that Albanian authorities have been dragging their
feet since CEZ took over the company in 2009 and preventing CEZ from
generating a profit.
On Tuesday CEZ officials met with
the Albanian prime minister and both sides agreed to quickly solve
the situation, that CEZ may leave the country, and that the prime
minister will nominate a negotiating team by the end of
October.
CEZ will decide by the end of the year if it
will sell the distribution company and has indications of interest
from potential buyers, including the Albanian government, venture
capital funds and electricity traders, Mr. Pleskac
said.
Separately, CEZ and Hungarian gas company MOL Nyrt
(MOL.BU) are nearing a final decision on whether to build a gas-fired
power plant in Hungary. Mr. Pleskac said the two companies are
exploring whether electricity prices make the plan economically
feasible.
In Bulgaria, where CEZ holds a 67% stake in
electricity generation and distribution companies, the company isn't
going to increase its stake. The Bulgarian government is selling its
33% stake on the Sophia stock exchange.
CEZ is slated to
release its third-quarter financial results on Nov. 8.