CEZ shareholders reject power sector restructuring plan

An extraordinary general meeting of the Czech power utility CEZ on Monday rejected an energy sector restructuring plan put forth by the Czech cabinet. The plan included an acquisition by the state-owned energy utility CEZ of the government's majority stakes in six of the eight regional electricity distribution companies and minority stakes in the other two. In exchange, the Czech National Property Fund was supposed to acquire a majority in the company CEPS which controls the power transmission system and is currently controlled by CEZ.

The National Property Fund, which holds a majority stake in CEZ and which voted down the proposal, had technical and legal objections to the transaction.

The Czech government had unsuccessfully tried to privatise CEZ and the regional distribution companies in one package, but was forced to delay the privatisation after bids from foreign investors fell short of the asking price.

Observers say it is extremely unlikely that the government would attempt to sell the national power utility before the June elections.