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UPDATE 1-Czech utility CEZ to get 100 mln euros in deal ending Albania row
June 24, 2014 / 8:01 AM / 3 years ago

UPDATE 1-Czech utility CEZ to get 100 mln euros in deal ending Albania row

(Adds details, background, shares)

PRAGUE, June 24 (Reuters) - Czech utility CEZ will receive 100 million euros ($136 million) in a settlement that ends a dispute with Albania over a power distributor, the company said on Tuesday.

Albania was keen to resolve the 18-month row so it could go ahead with a $200 million investment in its electricity sector, with the World Bank and other donors ready to back that with funding once the dispute was sorted.

Earlier this month, the CTK news agency also reported, citing EU sources, that the Czech Republic was prepared to block granting of EU candidate status to Albania because of the dispute.

The Balkan country stripped CEZ’s local unit of its licence and put it under the control of an administrator in January 2013. The move followed a row over imports and prices and prompted CEZ to take Albania to court.

Under the agreement, which will end arbitration proceedings, CEZ will receive 95.5 million euros as payment of receivables and transfer of shares in Albanian distributor CEZ Shperndarje, in addition to 4.5 million euros already received.

The payments will come in annual installments until 2018, CEZ said in a statement.

The settlement amount is similar to CEZ’s investment when entering the market in 2009 with the purchase of a 76 percent stake in CEZ Shperndarje.

“I consider the negotiated agreement as a success because we will receive funds significantly earlier and we will not need to wait several years for the results of arbitration proceedings,” CEZ Chief Executive Daniel Benes said.

In a joint statement with Albania, CEZ said the agreement contained “no acknowledgment of any wrongdoing by any party”. The terms of the settlement will be disclosed once final approval is given by national authorities, the statement said.

An Albanian government source said earlier this month that the donor money would be used to overhaul the grid, and not to pay CEZ any potential damages.

One of Europe’s poorest countries, Albania does not want to pay steep damages that would hit its energy sector, state finances and to damage its image with foreign investors.

CEZ shares were little changed after the news, trading flat on the day.

$1 = 0.7357 Euros Reporting by Jason Hovet; Editing by Louise Heavens and Mark Potter

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