March 9, 2018 / 3:13 PM / 6 months ago

Inercom says up to CEZ to decide on Bulgarian state stake

SOFIA (Reuters) - Bulgaria’s solar energy producer Inercom said on Friday it will be up to Czech utility CEZ (CEZP.PR) to decide whether to start talks between the companies and the Bulgarian state over a potential Bulgarian government involvement in the sale of CEZ’s Bulgarian assets.

FILE PHOTO: Czech electricity producer CEZ's logo stands next to an electricity pylon in front of the Ledvice coal-fired power plant near the village of Ledvice, Czech Republic, February 9, 2016. REUTERS/David W Cerny/File Photo

CEZ has signed a contract with Inercom to sell it a power distributor in the Balkan country along with other assets, but the deal, estimated at about 320 million euros ($393 million) sparked public concerns over Inercom’s ability to finance and operate strategic power assets.

In written responses to Reuters, Milena Stoeva, chair of the board of directors of Inercom Bulgaria, said the company did not believe the government taking a stake was the only way for Bulgaria to guarantee the public interest.

Bulgarian Finance Minister Vladislav Goranov, along with other politicians and analysts, believe that the Balkan country has enough tools to regulate the supply of electricity to consumers and its participation in the deal is not necessary.

“We agree with the finance minister and we don’t believe that the state acquiring a stake in CEZ businesses is the only way to guarantee the public interest,” Stoeva said.

She declined to reveal the value of the deal but said that the company, with total assets of about 100 million levs ($62.90 million), has made firm commitments to close the transaction and plans to deliver on them.

Addressing the concerns about the financing of the deal, Inercom said that it is holding talks with several global banks, much of which do not have offices in Bulgaria and that no offshore companies will take any part in the transaction.

The company said it has never discussed the financing of the deal with Russian banks and said it was ready to commit significant equity for the deal, but did not elaborate.

“Since signing the contract, the negotiations with the banks are progressing well,” she said, declining to name them.

“No offshore companies will take any part in this transaction. In case we wanted to make a transaction via an offshore company, we could have done that already, however we wanted to make a transparent transaction”.

Reporting by Tsvetelia Tsolova; Editing by Adrian Croft

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