Bulgaria will revoke the electricity transmission and distribution licence of a local unit of Czech power utility CEZ, prime minister Boiko Borisov said.
Borisov's statement comes as thousands of people in big cities across the country have been staging protests against high electricity prices in the past few days.
The licence of CEZ Razpredelenie Bulgaria will be revoked on the grounds of the findings of a recent check by the Public Financial Inspection Agency (PFIA), Borisov told a news conference without elaborating.
On Sunday the economy ministry said that, according to PFIA's report, CEZ Razpredelenie Bulgaria repeatedly circumvented the public procurement legislation from the middle of 2012 to the beginning of 2013. In the review period affiliated companies accounted for 83% of CEZ Razpredelenie Bulgaria's costs for external services and 92% of its expenditures for supplies.
Earlier on Tuesday the prosecutor's office said it will propose to the energy regulator to revoke the electricity transmission and distribution licence of CEZ Razpredelenie Bulgaria over regular violations.
CEZ Razpredelenie reiterated that it has not violated the Public Procurement Act.
Borisov also said that the government has proposed to the energy regulator a series of measures which would lead to an 8.0% drop in electricity prices as of March 1. These include reducing the energy distribution companies' regulator-approved costs and increasing the share of cheap electricity generated by the country's nuclear power plant in the energy mix on the basis of which end-consumers' bills are prepared.
Following Borisov's statement that CEZ Razpredelenie Bulgaria's licence will be revoked, the company's shares tumbled more than 10% on the Bulgarian Stock Exchange, prompting the bourse to suspend them from trading. The shares of the other CEZ unit which are traded on the local stock exchange - CEZ Electro Bulgaria - were also suspended from trading.
CEZ Razpredelenie Bulgaria and CEZ Electro Bulgaria operate in western Bulgaria, including the capital Sofia.
The economy ministry also said on Sunday that PFIA will conduct audits at the other two electricity distributors in the country - the local units of Austrian utility EVN and of Czech energy group Energo-Pro, as well.
Borisov said that all three were fined on Tuesday but provided no further details. He firmly rejected calls by protesters for the nationalisation of the power distributors.