Sofia court rejects regulator's decision to ban sale of CEZ assets in Bulgaria

Sofia court rejects regulator's decision to ban sale of CEZ assets in Bulgaria

The Sofia Administrative Court said it cancelled a decision by the competition regulator to ban the sale of local assets of Czech energy group CEZ to financial and insurance group Eurohold Bulgaria. The court returned the case to the anti-trust body and requested it to conduct a new probe into the proposed deal in line with the court-prescribed guildelines, it said in a desicion published earlier this week. The competition regulator will also have to pay 10,000 levs ($5,900/5,100 euro) in legal expenses to Eurohold Bulgaria. The regulator published its decison on the deal just 14 days after announcing that it will carry out an in-depth probe into it, even though interested parties are allowed by law to file statements regarding the effect of the deal on the competition on the respective markets within a 30-day period, the court noted in its ruling. However, interested parties did file such statements which were subsequently dismissed without an analysis, the court also said. In October, Bulgaria's competition authority decided to bar the acquisition of the local assets of CEZ by Eurohold Bulgaria with the motives that combining the experience of the economic resources and market positions of the two groups in the electricity and insurance sector creates prerequisites for the notified deal to lead to the establishment or strengthening of dominant position. "The funding for the deal has been secured by two global investment banks. Considering the target investment in the acquisition of CEZ Group’s companies, including the price of the deal, the purchase of the minority shares, the repayment of the debt of the acquired companies and the investment strategy for their development, a total amount of around 500 million euro [$555 million] would have been allocated in Bulgaria according to the holding’s estimates,"  Eurohold Bulgaria said in a statement following the regulator's decision at the time. Eurohold Bulgaria also said it has submitted documents proving evidence that it and its units do not have a leading position in terms of suretyship insurance on the domestic market and do not offer suretyship insurance to electricity traders in Bulgaria. The assets of CEZ in Bulgaria comprise power utility CEZ Distribution Bulgaria, power supplier CEZ Electro Bulgaria, licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group and CEZ Bulgaria.

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