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Czech cabinet agrees to sell 7% CEZ stake via capital markets

The Czech government decided to sell part of its stake in CEZ AS, the country's biggest power company, as it seeks funds to build roads and highways.

Cabinet members agreed to sell 7% of the company in equity markets, Finance Minister Miroslav Kalousek said at a press conference after their meeting. The stake is worth around 36 billion koruna ($1.7 billion) at CEZ AS's current share price. The utility, 67.7% state-owned, supplies more than two-thirds of the Czech Republic's power. Prime Minister Mirek Topolanek's administration wants to sell part of its industrial holdings to finance the construction of roads, bridges, railroads and other infrastructure projects. „It's evident that there is an enormous interest in CEZ shares” from both individual and institutional investors, Industry Minister Martin Riman at the press conference.

Topolanek said no minister voted against the proposal. The asset sale was opposed by the Green Party, according to Martin Bursik, that party's chairman and the state environment minister. Green Party ministers, which hold four of the 18 seats in the cabinet, abstained from the vote, he said. The transaction raised criticism from the opposition Social Democratic party, which it would deprive the state of the power to determine CEZ's future. CEZ shares fell 0.2% to 873.1 koruna (€31.45) by 4 p.m. in Prague, after two days of gains. „The government decided on the sale in the capital market as it is the most transparent and cleanest method,” Kalousek said. (Bloomberg)