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CEZ is ready to submit to the government an offer for a purchase of 55 per cent share in Severoceske doly and so increase its 37 per cent share in the company

13. 7. 2005

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CEZ is ready to submit to the government an offer for a purchase of 55 per cent share in Severoceske doly and so increase its 37 per cent share in the company

CEZ welcomes the decision of the government because it is important for CEZ to gain the majority in Severoceske doly, where it now owns over 37 per cent.

"It is a possibility to gain certainty for the future operation of the new or completely renewed power plants, to which CEZ is going to invest over 100bn CZK in the next years. Factual ownership provides us with higher certainty for future reliable operation of the plants," said Martin Roman, Chairman of the Board and CEO of CEZ. CEZ and Severoceske doly are mutually very dependent - 80 % of SD´s production go to CEZ and cover 60 % of CEZ´s needs. On this account, the merger of both firms is the only logical solution. Competitors use identical organization.

Brown coal, unlike black one, cannot be exported and freely traded (it is used only in the Czech Republic and former Eastern Germany, transport for long distances is not effective due to low volume heating power). On the other hand, power plants are equipped exactly for combustion of certain coal quality and they cannot be easily changed. There is no market environment here, whatever the ownership is.

Ladislav Kriz, Press Officer, CEZ, a.s.