CEZ eyes offshore windfarms in UK, Germany, France and Poland
* Up to EUR 2.2bn to be spent on buys over four years
* Western Europe increasingly targeted
* Opportunistic divestments also on cards
CEZ [WSE:CEZ], the Czech energy group, is interested in acquiring renewable energy assets including offshore windfarms in the UK, Germany, France and Poland, board member Tomas Pleskac said.
Pleskac, responsible for strategic development and new energy, said that CEZ could spend up to CZK 50bn (EUR 1.8bn) to CZK 60bn (EUR 2.2bn) on acquisitions over the next four years.
This would represent the state-controlled group’s first move into the offshore segment. CEZ is currently studying three German offshore windfarm targets and could potentially reach an agreement to acquire one or more “fairly soon”, Pleskac told this news service.
The typical size of such windfarms would be at least 400 MW, and the investment would be around EUR 100m per MW, he said. CEZ is seeking to acquire minority stakes of up to 49% in such windfarms as it so far has no know-how in offshore projects, he said.
Aquila Capital is advising CEZ regarding German wind opportunities, as per a company press release in January.
The company is also interested in other opportunistic acquisitions, for example in the Benelux countries as, CEZ increasingly points its radar at new western European markets, Pleskac said. While the company’s focus is on wind assets, it will could look opportunistically at other renewable targets, for example photovoltaic plants in Italy, he said.
CEZ is also interested in acquiring energy distribution and supply companies and energy traders in countries such as Germany, and heating companies in the Czech Republic and Poland. The key criterion is that they must be in countries with a stable regulatory environment, he said.
EDF's Polish assets
CEZ is interested in acquiring EDF’s [EPA:EDF] Polish assets, particularly the second phase of the sale process which will involve a larger number of plants, Pleskac said. However, this sale is likely to be at least three months away, he added. CEZ wants to significantly strengthen its market position in Poland’s heating sector, he said.
This news service reported that EDF is selling its Polish power generation assets in two separate processes. The first is to involve the Elektrownia Rybnik plant and the second is for thermal plants in Krakow, Gdansk, Wroclaw, Gdynia, Zielona Gora and Torun.
Rybnik reported sales of PLN 3.4bn (EUR 770m) and EBITDA of PLN 343m in 2014, according to a previous report.
CEZ was previously reported as being interested in acquiring Vattenfall’s German assets. The deadline for binding bids is tomorrow (16 March), but CEZ chairman and CEO Daniel Benes and deputy chairman and CFO Martin Novak declined to comment on whether CEZ would submit a bid.
The company looked at the opportunity to acquire Thyssengas, the German gas asset, but then decided against bidding, Pleskac said. According to an unsourced newswire report last December, Macquarie hired Bank of America Merrill Lynch to run the sale of German gas grid Thyssengas. Thyssengas is valued at EUR 500m-EUR 600m, according to another report.
Romania, Bulgaria tipped for potential disposals
CEZ is also interested in disposals of foreign assets as it seeks to optimise its portfolio, Pleskac said. This would be on an opportunistic basis, if it were approached by any interested parties. It has not mandated any advisers for any review, nor is it planning any concrete sale process, he said, declining to reveal which assets could be candidates for disposal.
One sector adviser mentioned Romania and Bulgaria as the most likely candidates for asset disposals by CEZ, given the unfavourable regulatory and political environments in these countries. While there is no known ongoing process involving CEZ’s foreign assets, it is no secret that CEZ would like to sell its Bulgarian thermal plant Varna, he said.
The company closed down Varna in January 2015 as it did not meet ecological standards, as previously reported. The adviser said that any disposals were likely to be on an opportunistic basis.
CEZ owns production assets in Poland, Romania, Bulgaria and Turkey.
The company will finance buys through a combination of its own resources and debt, CFO Martin Novak said. CEZ has scope to raise its debt/EBITDA ratio from 2.2 to between 2.5 and 3 to help finance buys, Novak told this news service.
Pleskac and Novak were speaking as CEZ reported that its EBITDA reached CZK 65.1bn in 2015, a 10% year-on-year decrease, which it largely attributed to falling electricity prices. Operating revenues were CZK 210.2bn in 2015, up 4% on 2014's CZK 201.8bn.