Today, CEZ took over the equity in distribution companies formerly owned by the state

As of today, the shares of regional power utilities are integrated into the CEZ Group. According to the most recent information, all the shares in question were transferred this morning, i.e. within the agreed deadline, and were subsequently properly registered in the accounting systems of the Czech Securities Commission. This means that the project of incorporating distribution companies into the CEZ Group has been concluded approximately one year after the governmental proposal of this merger.

The company is simultaneously transferring 66 % of its equity in CEPS, a. s. to the state. The transaction will generate a profit of 21 billion CZK for the state treasury.

Through this transaction, the CEZ Power Company will acquire a majority share in five distribution companies (however, the majority share in only two of them was purchased from the state), and minority share in three distributors. However, the Economic Competition Protection Authority has decided that CEZ had to sell one of its majority shares and three minority shares, and also its remaining equity in CEPS.

CEZ will pay a total of 32 billion CZK for the regional distributors, while the state will pay 15 billion CZK for a two third equity in CEPS (according to the current estimate). To this amount of money we must also add 4 billion CZK which CEZ will pay to the state treasury in income tax.

CEZ will repay the money in gradual instalments. The first instalment should redeem more than 1.5 billion CZK transferred onto the account of State Property Fund immediately after the equity transfer between the state and CEZ. CEZ will also pay 196 million CZK to the Czech Consolidation Agency in return for 2% equity in Zapadoceska energetika (West Bohemian Power Utility). Another amount of approx. 3.85 billion CZK should be remunerated to the State Property Fund in the middle of the year, while the remaining instalments will be gradually repaid before 2006.

The state company Osinek will acquire 51 % of CEPS shares, equivalent to 11.6 billion CZK and the remaining part up to two thirds, amounting to 3.4 billion CZK, will be transferred to the Ministry of Labour and Social Affairs.

The process of integrating CEZ and distribution companies began last Friday, by signing five bills of exchange worth 27 billion CZK. The bills of exchange were signed two working days before the transfer of the shares, as had been stated by the contractual agreement. Our company owns four of these bills, standing for the instalments for the shares in distribution companies; the remaining bill of exchange covers the sale of equity in CEPS, a. s.

Ladislav Kriz, CEZ Press Officer

1. 4. 2003