FILE: Czech power firm to withdraw from a 1.4 billion euros power project in Bosnia

Record ID: 722499

  • Title: FILE: Czech power firm to withdraw from a 1.4 billion euros power project in Bosnia
  • Date: 29th January 2009
  • Summary: GACKO, BOSNIA AND HERZEGOVINA (FILE - 2007) (REUTERS) GACKO POWER PLANT ELECTRICITY PYLONS AT POWER PLANT PEOPLE ATTENDING CEREMONY FOR COOPERATION BETWEEN CEZ AND SERB REPUBLIC VARIOUS OF INVESTORS FROM CEZ AND SERB REPUBLIC PRIME MINISTER MILORAD DODIK, SIGNING CONTRACT AND CONGRATULATING EACH OTHER VARIOUS OF CEZ INVESTORS LAYING CORNER STONE
  • Embargoed: 13th February 2009 12:00
  • Keywords:
  • Topics: Industry
  • Reuters ID: LVA19RAGB1NI3HC17QHLI6Y0CQ26
  • Story Text: The Czech power firm CEZ says it is to withdraw from a joint electricity venture in Bosnia&Herzegovina in a move analysts say will shake investor confidence.
    Czech power firm CEZ said it will withdraw from a 1.4 billion euros power project blaming joint venture partner, the Bosnian Serb government, for breaches of contract.
    CEZ and Bosnian Serb power utility EPRS signed the deal in 2007 -- at the time the largest ever investment into the Serb Republic -- to include the construction of a coal-fired power plant of up to 700 megawatts, development of a mine and reconstruction of an existing power plant in the south eastern town of Gacko.
    A representative of the Bosnian branch of Transparency International anti-corruption watchdog said the CEZ announcement will damage the reputation of the Serb Republic as an investment destination.
    Investors, activists, financial market analysts and media have said the government conducted negotiations in secrecy, failed to provide timely and accurate accounts, and had agreed to terms that hurt the interests of small shareholders.
    Critics also said the government failed to get a fair price by evaluating RITE Gacko at 204 million euros at a time when its market value at the bourse was 390 million euros.
    At the same time, small shareholders, who owned 20 percent in the firm through a post-war share compensation scheme, complained they ended up losing part of their savings without being consulted.
    Under the deal CEZ holds a 51 stake of Nove Elektrane RS, while the reminder belongs to the regional power company EPRS and small shareholders.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register