ČEZ faces key AGM: company split, dividend and board changes

Shareholders of energy group ČEZ will decide on the company’s future direction at Monday’s general meeting. One of the most anticipated agenda items will be discussion of a proposal to carve out the company’s non-generation operations into a new subsidiary. According to analysts, this is the first step towards the planned nationalisation of ČEZ. The general meeting will also decide on a dividend, which the company’s management has proposed at 42 Kč per share, or 23 billion Kč in total. Changes to ČEZ’s supervisory board are also expected, with the Ministry of Finance having nominated, among others, Radim Fiala, deputy chairman of the coalition SPD movement.

ČEZ management presented the proposal to establish a new subsidiary in April. It intends to carve out energy sales and distribution, trading and energy services from the current structure. This would include, for example, ČEZ Prodej, ČEZ Distribuce, GasNet, ČEZ ESCO, trading companies and telecommunications company Telco Pro Services. Under the proposal, the company would retain a 51 percent stake in the new subsidiary and offer the remaining part to investors.

However, the plan must first be approved by the general meeting. If it does so, the board of directors wants to launch the entire process immediately, with the new company then expected to be established by the end of the first quarter of 2027. Michal Šnobr, a minority shareholder in the company, said in recent weeks that the proposal made sense in his view, as it would provide the company with funds for the planned buyout of shares from minority shareholders. During Monday’s meeting, however, discussions can be expected particularly over the value of the stake in the new company. ČEZ chairman and CEO Daniel Beneš recently described the discussed amount of 150 billion crowns for the sale of the stake as a relevant estimate, but said he believed the figure would be higher.

A traditional item on the general meeting agenda will be the decision on the dividend for shareholders. ČEZ management has proposed it this year at 42 crowns per share. This corresponds to 80 percent of last year’s adjusted net profit. If the proposal is approved, the company would pay shareholders 23 billion crowns. The state, as the majority shareholder, has not submitted its own proposal this year. Last year, after approving the board’s proposal, ČEZ paid a dividend of 47 crowns per share, amounting to 25.2 billion crowns in total.

At the end of the meeting, shareholders will also vote on supervisory board members. Several changes can be expected in the 11-member board in the post-election year. The Ministry of Finance has so far put forward the nominations of coalition SPD MP Fiala, Josef Kotrba, executive director of the Energy Association, Deputy Environment Minister Vladislav Smrž, and Ministry of Finance representatives Karel Tyll and Petr Bejček. Members nominated by the previous government are expected to leave.

ČEZ Group is one of the largest energy companies in the Czech Republic. Its majority shareholder is the state, which holds around 70 percent of the shares through the Ministry of Finance. Nationalisation of the company is one of the stated goals of the current government, and by buying out minority shareholders’ stakes, the state would become the company’s sole owner.

Last year, ČEZ earned 27.4 billion crowns, with the company’s net profit falling year on year by 1.7 billion crowns. The company’s operating profit and revenues also declined year on year.