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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2006
Commission File Number 333-7182-01
CEZ, a. s.
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(Translation of registrant's name into English)
c/o Duhova 2/1444
140 53 Prague 4
Czech Republic
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________
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The following information was filed by CEZ, a. s. in Czech language with the
Prague Stock Exchange as required by its rules and regulations:
PRESS RELEASE
CEZ TO ACQUIRE THE BULGARIAN POWER PLANT VARNA,
ADDING 10% TO CEZ GROUP'S INSTALLED CAPACITY
Sophia, May 4, 2006 - CEZ Power Company and representatives of the Bulgarian
Privatization Agency have signed a privatization contract for the purchase of a
black-coal-fired plant in Varna. With its installed capacity of 1,260 MW, the
plant will increase the generating capacity of the CEZ Group in the Czech
Republic and Poland by nearly 10%. CEZ also signed a Memorandum with the
Bulgarian Ministry of Economy and Energy committing CEZ to invest an amount of
40m EUR into power projects in Bulgaria within 4 years.
"This day is another milestone in the fulfilment of our vision of becoming
number one in the electricity markets in Central and South-Eastern Europe. It is
very pleasant that we have managed to acquire a part of power generation in
Bulgaria, where we have owned a part of distribution since last January," Jiri
Borovec, Vice-Chairman of the Board of Directors and director of the production
division of CEZ, said at the signing of the contract.
"CEZ Group has long-term experience in operating thermal plants and making them
more environmental friendly; their installed capacity accounts for more than
half of our production portfolio. In the years 1992-1997 we completely
desulphurized all our thermal plants, which now meet the tough EU emission
standards. We are now preparing a comprehensive program for the renewal of our
production portfolio. We are planning to use all that experience in the case of
the Varna power plant as well," added Jiri Borovec.
"The privatization of Varna TPP is crucial to the sustainable development and
the security of supply of the Bulgarian energy sector before the country's
accession to the EU. I am glad that CEZ as a strategic investor, after taking
its first steps in Bulgaria, remains focused on the opportunities in the
Bulgarian energy market and has committed itself to bringing Varna TPP up to EU
standards," said Rumen Ovcharov, Bulgarian Minister of Economy and Energy on the
occasion of the signing of the Varna TPP deal.
CEZ will pay an amount of over 206m EUR (about VZK 5.8 billion) for 100% of
shares in the Varna plant to the Bulgarian government. Another almost 100
million EUR (about CZK 2.8 billion) will be used for a 16% capital increase,
bringing the total investment in Varna to 306m EUR.
In addition, CEZ also signed a memorandum with the Ministry of Economy and
Energy committing CEZ to invest an amount of 40m EUR into power projects in
Bulgaria within 4 years. These projects involve, for example, electricity from
renewable sources - hydroelectric power plants, biomass combustion, or power
infrastructure projects.
The closing of the transaction (i.e. share transfer and payment of the purchase
price) is expected to take place in the next few weeks, following the
satisfaction of the conditions precedent, i.e. the clearance by the Bulgarian
antitrust office and the negotiation with NEC of the conditions for the
operation of the plant under the "cold reserve."
"Given our long-lasting commitment to the Bulgarian power industry, we are glad
that we are adding an important plant to the present three distribution
companies. Our experience with the local environment has been positive so far,
and we feel a very close relation between our cultures. Our Bulgarian colleagues
are actively participating in the work of the entire CEZ Group, not only in
Bulgaria. After our presence in Bulgaria for two years, we can say that the
entry into this market was a step in the right direction. This is confirmed by
last year's strong performance of our Bulgarian distribution companies, and both
sides benefit from the integration," Tomas Pleskac, Member of the Board of
Directors and director of distribution division, commented on the signing of the
contract.
The Varna power plant is situated in the South-Eastern Bulgaria near the Black
Sea port of the same name, and its location therefore offers a fairly
significant logistic advantage. Due to its installed capacity of 1,260 MW
(6 x 210 MW), Varna will become the largest conventional plant of the CEZ Group,
making the largest power plant so far - the Prunerov plant II (5 x 210 MW) in
North Bohemia - number two. Varna burns imported black coal, and in 2003 it
generated about 2.3 TWh of electrical energy. The production in the following
ten years,
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however, is expected to increase gradually to a level of 4 - 6 TWh, due mainly
to modernization and a growing demand for electricity in Bulgaria and the whole
South-Eastern region of Europe.
In its foreign expansion, the CEZ Group has already succeeded in Bulgaria, where
it has acquired three distribution companies in the west of the country since
January 2005. As regards distribution, CEZ has also acquired the Romanian
distribution company Electrica Oltenia, which supplies power to the region
directly neighbouring the Bulgarian distribution area of the CEZ Group. With
respect to power generation, CEZ concluded with the American PSEG a contract for
the purchase of two power companies, Elcho and Skawina, at the beginning of this
year, and is continuing to seek new opportunities in its target region of
Central and South-Eastern Europe.
ATTACHMENT:
INSTALLED CAPACITY OF CEZ GROUP
Czech Republic 12,298 MW
Poland 810 MW Elcho and Skawina Plants
Bulgaria 1,260 MW Varna Plant
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Total 14,368 MW
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CEZ, a. s.
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(Registrant)
Date: May 4, 2006
By: /s/ Libuse Latalova
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Libuse Latalova
Head of Finance Administration
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