UPDATE 1-Czech CEZ says to double dividend, extend buyback

                                
 (Adds details, background, share price)
                                
 PRAGUE, April 7 (Reuters) - The board of Czech power firm
CEZ <CEZPsp.PR> will propose doubling its dividend, cancel
nearly 10 percent of shares and extend its buyback programme,
the company said on Monday.
                                
 The decisions are in line with CEZ's previous announcements
it would raise the dividend pay-out ratio and most likely cancel
stock held by the company.
                                
 "Overall, more than 21 billion crowns ($1.32 billion) is
earmarked for dividends," CEZ said in a statement. "The majority
owner, the state, will receive more than 15 billion."
                                
 CEZ, the largest central European company, with market
capitalisation of $45 billion, had earlier announced it would
raise the dividend payout ratio to 50-60 percent of net profit,
excluding one-off gains, from a previous 40-50 percent.
                                
 The electricity producer netted 42.76 billion crowns last
year.
                                
 CEZ said it would also propose at an annual meeting on May
21 to cancel shares bought in an ongoing buyback. The
cancellation will not affect a small portion of shares earmarked
for an option scheme, it said.
                                
 CEZ has bought back 9.37 percent of its stock, nearly all
the limit of 10 percent. 
                                
 It said the current capital structure further provided room
for a continuation of the company's expansion strategy, but the
planned projects may not require cash for some time, and the
company expected growth in free cash flow.
                                
 Therefore, it would ask shareholders to approve another up
to 10 percent buyback limit.
                                
 "Unlike last year, CEZ does not expect that the second
buyback programme would be realised with such regularity as the
first one," it said.
                                
 "Timing and size of the buyback will be given by development
on the financial markets, regular updating of a cash flow
forecast, the time breakdown of investment opportunities and the
needs of CEZ and legal regulations."
                                
 CEZ shares closed up 0.58 percent at 1,220 crowns ahead of
the news on Monday, trailing the main PX <.PX> index, which
gained 1.26 percent.
 (Reporting by Jan Lopatka, editing by Will Waterman)