Czech Power Utilities Stocks Drop after Bulgarian Protests

Nation-wide protests in Bulgaria against high electricity bills have slumped the value of the shares of Czech-owned power utility CEZ.

Top business information agency Bloomberg reported Monday that CEZ shares have declined 0.5% to CZK 616 at 12:05 p.m. in Prague, falling for a fourth day and valuing the company at CZK 331.4 B (USD 17.4 B). Bloomberg explains that the company controls companies that supply electricity to Sofia and the northern city of Pleven, which together account for 41% of Bulgaria's power consumption.

"The EU's poorest state in terms of per-capita output weathered the global crisis without borrowing from international lenders and wants to keep its budget gap at 1.3 percent of gross domestic product this year, to help contain the impact from the euro-area crisis.

Higher electricity and heating bills caused by the cold weather combined with low wages and rising unemployment triggered nationwide protests against energy utilities and the government in the past 10 days.

Protesters threw stones and broke the windows of the office building of Energo-Pro in the Black Sea city of Varna yesterday, police said. Four people were arrested after police clashed with protesters in Sofia yesterday, according to the police. A protest rally is scheduled in the capital today," Elizabeth Konstantinova reports for Bloomberg from Sofia.

The article further informs Bulgaria will consider revoking CEZ power distribution license after the State Financial Inspection Agency's probe into the largest Czech utility. It reminds that the Albanian energy regulator revoked CEZ's license in January following disputes over tariffs and taxes.

The CEZ headquarters in Prague had no immediate comment on the situation in Bulgaria when contacted Monday by phone by Bloomberg.

The latest developments have led to the decline of CEZ shares on the Bulgarian Stock Exchange as well. Stocks fell by nearly 7% by 3:30 pm, compared to the Exchange opening.

The shares of the other Prague-based utility, Energo-Pro, have also fallen by over 5%.

Bloomberg explains that Bulgaria sold seven power distributors in 2005 to EON SE, CEZ and EVN before joining the European Union. EON sold its Bulgarian companies to Energo-Pro in 2011.