Realization of Purchase of the ČEZ, a. s. Own Shares (the so called Share-Buy-Back Program).
The General Meeting of the ČEZ, a. s. utility company, held on April 23, 2007 in the Congress Centre in Prague passed, among others, a resolution concerning acquisition of the company’s own shares. Based on this decision, the ČEZ company selected and entrusted two major Czech brokers – the WOOD & Company Financial Services, a.s. and the Patria Finance, a.s. with the realization of the purchases concerned.
The General Meeting approved that the ČEZ company may acquire own equity shares as from April 23, 2007 in the quantity, which does not exceed 59,221,084 pieces in total. The lowest price, at which the ČEZ company shall be allowed to acquire its shares, is CZK 300,- per share. The highest price, at which the company shall be allowed to acquire its shares, is CZK 2,000.- per share.
The validity period of the resolution of the General Meeting, which means the period during which the ČEZ company is authorized to acquire own shares, shall be 18 months as from the date of holding the General Meeting.
The acquired shares can be used by the company for the following purposes:
- for reduction of the equity capital of the company,
- for fulfilling the commitments arising from the joint-stock option programs namely within the amount of 5 million pieces.
Further to the resolution of the General Meeting, the Board of Directors decided to commence the share-buy-back program on April 25, 2007 and this was approved by the Board of Supervisors of the ČEZ company on April 27, 2007 as well.
The share-buy-back program shall be realized on the regulated markets, on which the company’s shares are quoted (Prague, Warsaw), namely on the anonymous market so that no discrimination was suffered by the company’s shareholders. Based on the recommendations provided by the legal advisors from the Brzobohatý, Brož & Honsa, v.o.s. law office, the realization of the share-buy-back program shall be in accordance with the relevant legislation of the Czech Republic, particularly with Act No. 513/1991 Coll., the Commercial Code, and with Act No. 256/2004 to regulate business activity on the capital market, and with the legislation of the EU, particularly with the EC Commission Regulation No. 2273/2003 (including price and quantity restrictions concerning share-buy-back purchases).
For the realization of the share-buy-back program, the ČEZ company selected, on the basis of the selection procedure, two most active traders in securities on the Czech capital market – the WOOD & Company Financial Services, a.s. and the Patria Finance, a.s. companies. Upon realization of the purchases, the traders shall proceed independently of the ČEZ company and without its influence, with a reasonable professional care and in the best interest of the company, and they shall keep the company informed of unexpected events and, in compliance with the principle of the professional care, they shall provide recommendations concerning further steps.
The reason for the realization of the share-buy-back program is the current ineffective structure of the capital and the unsatisfactory dept-to-equity ratio of the company. Timing of the realization of the share-buy-back program was also affected by the decision of the Government of the Czech Republic of March 19, 2007 concerning the sale of part of the ČEZ ČEZ, a. s. Company Id. 45274649 company’s shares through the capital market. The released intention of the Government of the Czech Republic offers an interesting opportunity how to realize the share-buy-back program of the ČEZ company shares by method, which is beneficial for the company and for its shareholders as well.