July 19 (SeeNews) - The share price of both CEZ Electro Bulgaria [BUL:1CZ] and CEZ Distribution Bulgaria [BUL:3CZ], part of Czech energy company CEZ Group, declined in the double digits on the Bulgarian Stock Exchange, after earlier on Thursday the local competition regulator banned the sale of CEZ assets in the country to Sofia-based Inercom.
As at 12:00 CET, CEZ Electro Bulgaria shares traded 11.21% lower at 19,000 levs, while CEZ Distribution Bulgaria shares traded 11.29% lower at 220 levs, bourse data shows.
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Earlier on Thursday, the Commission for Protection of Competition said that according to its analysis, the deal will affect competition as it would lead to the establishing of a dominant position.
The deal is of a strategic importance for the country and its potential effects would have direct implications for national security, due to the the wide range of activities of the companies being acquired and their importance to the Bulgarian electricity system, the regulator added.
In June, Bulgaria's competition authority said it has received a request from Sofia-based Inercom to approve the purchase of seven local companies owned by Czech energy company CEZ Group.
CEZ assets in Bulgaria includes seven companies - power distributor CEZ Razpredelenie [BUL:3CZ], power supplier CEZ Electro Bulgaria [BUL:1CZ], licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group and CEZ Bulgaria, which manages and coordinates the operations of the group's Bulgarian units.
The price of the transaction was 326 million euro ($378.3 million), according to CEZ Group's annual financial statement published in March.
The contract between CEZ Group and Inercom was signed on February 23. The deal raised concerns about Inercom's ability to finance the acquisition, which resulted in the establishment of a parliamentary ad hoc committee with the purpose of looking into the deal.
Inercom Bulgaria was incorporated for the purpose of the deal with CEZ. It is a wholly-owned subsidiary of Sofia-based Inercom Investments, according to data from the Bulgarian commercial register. The company has a registered capital of 50,000 levs. Inercom manages six solar parks in southern Bulgaria with a total capacity of 23 MW and is also developing a project for a 80 MW solar park.
($ =0.8618 euro)