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UPDATE 1 - Inercom says remains committed to completing buy of CEZ assets in Bulgaria

UPDATE 1 - Inercom says remains committed to completing buy of CEZ assets in Bulgaria CEZ

SOFIA (Bulgaria), December 3 (SeeNews) - Inercom Bulgaria said on Monday that it is working towards receiving regulatory approval and completing its deal with CEZ for the acquisition of the Czech energy group's assets in Bulgaria.

The contract between CEZ and Inercom is still valid, Inercom Bulgaria said in a statement.

Inercom Bulgaria has the support of global investment banks for the finalisation of the transaction, the company added. It did not elaborate.

Earlier on Monday, CEZ told SeeNews that it plans to start parallel negotiations with India Power over the sale of CEZ assets in Bulgaria, although its agreement with Sofia-based Inercom remains valid. 

"CEZ intends to commence parallel negotiations with India Power - the next ranked bidder - which has already confirmed its continuing interest in purchasing the Bulgarian assets of CEZ," Alice Horakova, CEZ press officer, said in an emailed response to a SeeNews enquiry.

Despite the fact that the time period designated for Inercom to fulfil the conditions precedent to the purchase of the Bulgarian assets of CEZ expired on November 30, the share purchase agreement entered into with Inercom currently remains valid, Horakova added.

At present, CEZ and Inercom are both challenging the decision of Bulgaria's anti-trust regulator to block the transaction.

In July, the Commission for Protection of Competition banned the deal, saying it will lead to the establishing of a dominant position on the photovoltaic energy generation market. Later that month Inercom and CEZ appealed the decision before Bulgaria's Supreme Administrative Court.

Subsequently, Inercom sold its photovoltaic business in order to address the concerns of the competition authority and asked for the start of new proceedings. The Commission for Protection of Competition declined the request, saying that the initial proceedings have not yet been closed, as its decision is currently being challenged in court.

CEZ assets in Bulgaria include 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 is 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. It 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 sale and purchase agreement.

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.

($ = 0.8618 euro)

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