EPH plans one of the largest bond issues on the Czech market

EPH Financing CZ a.s., a subsidiary of Energetický a průmyslový holding (EPH), issued a bond issue announcement dated 17 March 2020. The bonds will have a maturity of 5 years, with interest of 4.5% p.a. paid semi-annually.

The energy group of investor Daniel Křetínský has issued a prospectus for the bond issue. The issue volume is set at CZK 5 billion, with the option of increasing it to CZK 7.5 billion. The bonds are structured as five-year instruments, maturing in 2025, and carry interest of 4.5% p.a. They will be guaranteed by parent company EPH.

This is not the first bond issue undertaken by the company. In 2015, 2016 and 2018, it borrowed CZK 2 billion from creditors in each of the first two issues, while the prospectus for the most recent issue two years ago was set at CZK 3-4.5 billion.

“We expect this to be one of the largest bond issues on the Czech market. We welcome the interest of banks supporting EPH in optimising the maturity profile of its debt, which is low compared with major European energy players. This reflects the group’s stable performance thanks to the operation of regulated and long-term contracted assets in energy infrastructure and power generation,” said EPH chief financial officer and board member Pavel Horský.

EPH Group is active in the energy sector not only in Czechia, but particularly in western markets, where it has invested heavily in conventional power sources in recent years. It is now often converting these to burn biomass instead of coal, or competes with it in capacity auctions.

EPH’s net profit for 2018 totalled CZK 16 billion and revenues reached CZK 179 billion. As EPH states on its website, the proceeds from the new bond issue will be used primarily to refinance existing EPH Group debt maturing in 2020.