November 22, 2018 / 10:06 AM / 4 months ago

Head of Czech utility CEZ says company should consider squeezing out minorities: newspaper

FILE PHOTO: Czech Republic's Prime Minister Andrej Babis arrives at the European Union leaders summit in Brussels, Belgium October 18, 2018. REUTERS/Piroschka van de Wouw/File Photo

(Reuters) - Czech energy company CEZ should consider squeezing out minority shareholders from part of the company, Chief Executive Daniel Benes was quoted as saying by local newspaper Lidove Noviny on Friday.

State-controlled CEZ and the government are embroiled in a debate over how to finance the construction of a new Czech nuclear plant.

Prime Minister Andrej Babis has long preferred CEZ to be the investor in the nuclear project, but CEZ has refused so far to build plants without explicit government backing.

Benes has previously proposed splitting CEZ into a production unit, wholly controlled by the state - which would be responsible for the risky business of building a nuclear plant - and a distribution and trading unit in which the state could hold a minority.

The state, which owns 70 percent of the company, opposes the plan to split the company. Minority shareholders oppose CEZ building nuclear facilities without additional state backing, so squeezing them out might be a way to appease them as they would not have to invest in nuclear plants.

“I think that CEZ should consider whether to squeeze out minority shareholders from some part of the company. But this discussion is ongoing and it has not had any conclusion yet,” Benes said according to Lidove Noviny.

The government plans to decide on a financing model for a new unit, to be built at the existing Dukovany power plant, in the coming months.

Reporting by Robert Muller; Editing by Susan Fenton

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