RPT-Czech parties agree to keep CEZ majority

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The main Czech political parties negotiating the programme for a possible coalition have agreed to keep a majority stake in power company CEZ for at least four years, party officials said on Wednesday.

The ruling right-wing Civic Democrats (ODS) are in talks with the leftist Social Democrats and the centrist Christian Democrats on forming a new cabinet to replace the ODS minority administration which lost a confidence vote in October.

The parties want to conclude the talks by Friday, but it remains unclear as to whether they can agree on a government six months after a general election saw the left and centre-right both win 100 seats in parliament.

As part of their negotiations, they have agreed the state should keep a majority stake in CEZ until 2010, a year when the next regular election is scheduled.

"In the programme manifesto (of the potential cabinet), there will be a ban on the sale of a majority in CEZ until 2010," Social Democrat energy expert Milan Urban told Reuters in parliament.

Civic Democrat Industry Minister Martin Riman confirmed there was agreement on the issue.

Urban said that separately, the Social Democrats have dropped their opposition to a Civic Democrat plan to sell a roughly 5 percent stake in CEZ to raise 31 billion crowns for next year's budget.

The government holds 68 percent in the power company, which has a market capitalisation of $28 billion and is the most valuable Czech asset still awaiting privatisation.

"We are not fundamentally against (the minority stake sale) but we would want that to be through the method of buyback," Urban said adding that the sale was not on the agenda of the expert talks on the next government's programme.

However, a share buyback directly by the company could be stopped by regulatory issues.

Riman said there may be a simultaneous process of the government gradually selling its shares on the market, while CEZ would be conducting a buyback from the open market.

[PRAGUE/Reuters/Finance.cz]