State-owned Vattenfall, which is under pressure from the Swedish government to get out of its profitable lignite power business in Germany because it is heavily polluting, said it would sell its German lignite plants.
“We are definitely ready to look at the assets,” CEZ CFO Martin Novak said at the Reuters East European Investment Summit in Prague. The plants could be operated profitably for years to come despite current low electricity prices, which have deterred investors from building new power capacity, he said.
“The logic is very simple,” Novak said. “Yes, it makes no sense to build anything new at 30 euros per megawatt-hour anymore, but it does make sense to buy something, discounting it with cash flow.”
CEZ, Europe’s seventh-biggest utility with a market capitalization of $11.5 billion, has maintained strong cash flow and lower debt than many of its peers. The company has been looking at expansion opportunities as others are forced to sell.
