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Czech CEZ Cancels $15 Billion Nuclear Tender Amid Low Power Prices
http://www.businessweek.com/news/2014-04-10/cez-cancels-15-billion-nuclear-tender-amid-low-power-prices
CEZ Cancels $15 Billion Nuclear Tender Amid Low Power Prices (2)
By Ladka Bauerova and Lenka Ponikelska April 10, 2014
CEZ AS, the largest utility in the European Union’s former communist east, canceled a $15 billion tender for two new reactors at its Temelin nuclear power plant.
Shares and bonds rallied today after the utility notified the remaining bidders, a Russian-Czech consortium led by Rosatom Corp. and Westinghouse Electric LLC, of its decision. It also informed Areva SA (AREVA), which was excluded in 2012.
With European power prices near record lows, CEZ board members voted today to cancel the tender after Prime Minister Bohuslav Sobotka’s government refused to provide guarantees on the purchase price of electricity from the units. It also rejected any other form of support that would render the project economically feasible.
<snip>
CEZ shares rose as much as 3.7 percent, its biggest rally since March 24, and closed up 2.9 percent at 562 koruna in Prague. It was the best performance today in the Stoxx Europe 600 Utilities Index. The stock is up 8.7 percent this year. The yield on CEZ’s Eurobonds due June 2020 fell three basis points, or 0.03 percentage point, to 1.95 percent.
<snip>
Power for next-year delivery in Germany, where CEZ sells part of its output, has slid 7.6 percent this year to 34 euros per megawatt-hour, adding to declines of 16 percent in 2013 and 14 percent in 2012. The contract reached a record intraday low of 33.65 euros on April 3, data compiled by Bloomberg shows.
CEZ Cancels $15 Billion Nuclear Tender Amid Low Power Prices (2)
By Ladka Bauerova and Lenka Ponikelska April 10, 2014
CEZ AS, the largest utility in the European Union’s former communist east, canceled a $15 billion tender for two new reactors at its Temelin nuclear power plant.
Shares and bonds rallied today after the utility notified the remaining bidders, a Russian-Czech consortium led by Rosatom Corp. and Westinghouse Electric LLC, of its decision. It also informed Areva SA (AREVA), which was excluded in 2012.
With European power prices near record lows, CEZ board members voted today to cancel the tender after Prime Minister Bohuslav Sobotka’s government refused to provide guarantees on the purchase price of electricity from the units. It also rejected any other form of support that would render the project economically feasible.
<snip>
CEZ shares rose as much as 3.7 percent, its biggest rally since March 24, and closed up 2.9 percent at 562 koruna in Prague. It was the best performance today in the Stoxx Europe 600 Utilities Index. The stock is up 8.7 percent this year. The yield on CEZ’s Eurobonds due June 2020 fell three basis points, or 0.03 percentage point, to 1.95 percent.
<snip>
Power for next-year delivery in Germany, where CEZ sells part of its output, has slid 7.6 percent this year to 34 euros per megawatt-hour, adding to declines of 16 percent in 2013 and 14 percent in 2012. The contract reached a record intraday low of 33.65 euros on April 3, data compiled by Bloomberg shows.