Dispute over price of ČEZ's stake in JESS continues, new valuation to decide

Bratislava, 24 August (CTK correspondent) – The valuation of Czech group ČEZ's stake in Slovak company Jadrová energetická spoločnosť Slovenska (JESS), which is preparing the construction of a new nuclear power plant in Slovakia, will be reviewed by another advisory firm. Slovak Prime Minister Robert Fico announced this today in a statement. He did so following a dispute with the economy ministry over the price the state is to pay to acquire ČEZ's stake.

Slovakia and ČEZ founded JESS during Fico's first government in 2009. However, Fico's current cabinet has decided that the new power plant will be state-owned, and the state will therefore buy ČEZ's 49% stake in JESS. The economy ministry was tasked with arranging the move, but failed to do so even by the extended deadline, which expired in July this year. The ministry then said last week that completion of the transaction was being held up mainly by differing views on the value of ČEZ's stake.

According to an expert valuation previously prepared by audit firm EY, the market value of ČEZ's stake in JESS is EUR 189 million (more than CZK 4.55 billion).

Fico said that JESS shareholders, namely ČEZ and state-controlled Slovak company JAVYS, had agreed to his proposal to have the expert valuation reviewed by another advisory firm. ČEZ and JAVYS are to select the firm. The Slovak economy ministry had previously proposed a similar step, but Fico had then criticised the ministry, chiefly for failing to meet the deadline for settling the ownership stakes in JESS.

The Slovak prime minister also announced that the government would adopt a decision under which the new nuclear project and related decisions would henceforth be handled by the government office and the relevant government commissioner, rather than the economy ministry.

ČEZ said last week that it was considering legal action over speculation concerning its stake in JESS. According to the Czech company, media speculation that the value of ČEZ's stake in JESS was not determined transparently is nonsense and harms the company.

According to previous information, US company Westinghouse is expected to become Bratislava's main partner in building the new state-owned nuclear unit. For the construction of the new power plant, with a capacity of around 1,200 megawatts, the state wants to use the existing infrastructure at Jaslovské Bohunice, where Slovakia shut down two units of the older V1 nuclear power plant in 2006 and 2008 in order to meet EU commitments. At the same site, Slovakia's largest electricity producer, Slovenské elektrárne (SE), part of the Energetický a průmyslový holding (EPH) group, operates its own nuclear power plant.