CEZ sent a letter to the Slovakian State Property Fund today, in which it expressed its preliminary interest in buying the offered 49% equity shares in three Slovakian distribution companies. These include three power companies: Zapadoslovenskaenergetika (ZSE - North Slovakia), Stredoslovenska energetika (SSE Central Slovakia) a Vychodoslovenska energetika (VSE East Slovakia).

This is another step of the CEZ strategy, which aims to establish a strong business company which, with a support from the currently selected strategic partner of CEZ, is to become the leader of the electricity market in Central Europe. The established company should be able to compete with other large European power companies, etc.

CEZ is currently making thorough preparations for the upcoming speedy and extensive liberalisation process and for the establishment of an open electricity market both in the Czech Republic and in Europe, which is to be launched in compliance with the valid and currently prepared EU legislation. CEZ is convinced that in the long run a good company management alone will not be a sufficient tool for optimising customer services and subsequently for succeeding in the newly emerging market. In addition to this, the company must also have appropriate structure and size, which will enable it to minimise costs per unit by buying in appropriate bulk and by benefiting from synergies in a supplier chain. CEZ is therefore interested in extending its entrepreneurial activities, whose main focus would still remain in its core field - electricity production.

In the long term, CEZ expects the above-mentioned equity participation to yield small but reliable revenues, corresponding to the future regulated business activities of the distribution companies. These revenues will perform the role of a stabilisation element in CEZ business portfolio, because electricity production ranks among the more risky entrepreneurial activities. In near future CEZ would like the Slovakian power companies ZSE, SSE and VSE to play significant roles and intends to use their experience in the process of establishing customer-service systems in other regions. The interconnection between these companies and CEZ will provide better conditions for increasing the potential of all partners and also for the financial and commercial development of the company. By entering Slovakian power industry CEZ also improves its own position in the next planned step, i.e. its participation in the privatisation of a dominant Slovakian electricity procurer Slovenske elektrarny,a.s. the synergetic effects would thus reach a much higher level. A considerable advantage in the process is the unique cross-border relationship of the two countries, as well the similarity of its languages and cultures. The proximity of the two countries is also apparent in the technical base, because the power industries of both countries developed for many years within the same state .

CEZ assumes that its activities in Slovakian distribution companies will be based on the fact that both national economies have similar objectives, and that the company will also be able to use the long-term super-standard co-operation between the two countries in the area of power industry. History has already shown that we are able to co-operate and that the co-operation is beneficial for both partners.

CEZ plans to finance the purchase of the shares mainly from its own funds and from borrowed assets.

Ladislav Kriz, Press Officer of CEZ