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Asset sales of ČEZ Romania to be delayed due to new emergency legislation

The Romanian government decided to put on halt the sale and purchase of majority stakes in energy companies until the end of the state of emergency, that was just extended to the middle of May.

According to the announcement of the Ministry of Interior, the prohibition applies to all companies which are part of the national energy system, regardless of the form of their ownership. The sale and purchase procedures will be resumed once the state of emergency is lifted.

The announcement comes as Czech energy group ČEZ was pressing ahead with plans to sell off its assets in Romania. The group’s main divisions in Romania are the Oltenia power distribution system and the Fântânele-Cogealac wind farm of 600 megawatts (MW), the biggest one in mainland Europe. The divestment of Romanian companies is in line with ČEZ Group’s new strategy, to scale back its operations in Bulgaria, Romania, Turkey and partly also in Poland, with the exception of companies focused on the field of modern energy services.

Last year ČEZ announced that it intended to sell seven companies in Romania, keeping only those engaged in energy services (ESCO) activities and part of trading. The companies are Energy Distribution Oltenia, Ovidiu Development, Tomis Team, MW Team Invest, ČEZ Vanzare, TMK Hydroenergy Power and ČEZ Romania. Bidders could submit bids both for the entire package and for individual assets.

“The first stage of the sales process was completed by the acceptance of 19 non-binding offers,” stated the company at the end of March. “The submission and evaluation of selected binding offers are expected in the second quarter of 2020, with a transaction projected to be executed by mid-2021.”

Companies that are said to be interested in ČEZ’s assets include state-controlled Hidroelectrica, the largest electricity producer in Romania, that is reportedly interested in taking over the wind farms and power supply from the Czech company, while the electricity distribution and supply group Electrica, in which the state holds a 49 per cent stake, might purchase the energy distribution from Oltenia.

ČEZ is one of the leading integrated energy companies in Romania. Its assets include one of the largest distribution companies in the country with a customer portfolio of 1.4 million, delivering 6,826 GWh of electricity in 2018. ČEZ intends to invest in renewable energy sources, new nuclear units and the modernisation of the power grid after selling some of its foreign assets.

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