Varna Power Plant

Active

In October 2006, Czech power utility company CEZ acquired 100% of the Varna power plant in Bulgaria for $259 million (206 million Euro). Initially CEZ offered 192 million Euro and then raised its offer by 14 million Euro. Under the terms of the contract, CEZ also pledged to invest $126 million (100 million euro) and did so by raising the power plant’s capital 16% through issuing new shares which CEZ itself acquired. The purchase price of the each shares (572,821 total shares) was 359.63 euro. Varna power plant was the second-largest thermal power plant in Bulgaria. 1260-MW coal fired Varna plant was located near the Black Sea port in south-eastern Bulgaria . It comprised six 210-MW units, firing on imported coal. The power plant produced 2.3 billion kWh of electricity annually. CEZ planned to increase the annual production to 4-6 billion kWh over the next 10 years. Initially, in April 2005, the Russian energy group Unified Energy System (UES) offered the highest price, 579 million euro, for the acquisition of Varna plant and became the winner of the tender. UES wanted to purchase the Varna plant together with 400-MW Ruse power plant. However, the Bulgarian antitrust office cancelled the sale of Ruse. Thus, UES withdrew from its offer in January 2006. The other companies which took part in the tender were Czech power company CEZ, Italian energy provider ENEL and Greek state-owned energy company Public Power Corporation. CEZ was the largest electricity producer in the Czech Republic. In 2005,the company acquired 67% of three Bulgarian electricity distribution companies, Elektrorazpredelenie Stolichno JSC, Elektrorazpredelenie Sofia Oblast JSC, and Elektrorazpredelenie Pleven JSC. Update 2007-2010 2011 capex from 2011 AR (pg 117) http://www.cez.cz/edee/content/file/investors/2011-annual-report/VZ2011aj.pdf

High