CEZ and CVC to compete for Czech gas network GasNet

The majority state-owned Czech energy utility CEZ and private equity group CVC Capital Partners are to place competing bids for the Czech gas distribution network, Reuters reported, referring to two sources close to the talks.

In August, Reuters also quoted CEZ deputy chairman Pavel Cyrani, who then said that “GasNet is an asset that interests us”, adding that when a formal sale process “is started, we could certainly prepare a very high-quality offer”.

A consortium of investors led by Macquarie Asset Management (MAM)  triggered the sale of GasNet in June.  

MAM controls a 50.04% majority in GasNnet, which it acquired from German energy group RWE for €1.8bn in 2019 after holding a 35% share since 2013. The group of MAM investors includes British Columbia Investment Management and Allianz Capital Partners. GasNet covers 80% of the country’s gas distribution network.

Reuters noted that Macquire and the Austrian Retirement Trust are selling a 55% stake, referring to its sources. Bids are due on January 26, and Morgan Stanley is leading the process.

The state will closely watch the transaction as the sale of the strategic property is subject to legislation on foreign investments.

GasNet's net profit dropped by some 35% to CZK1.89bn last year. It has 2.3 million customers covering all the regions in the country except for Prague and Southern Bohemia and operates 65,000 kilometres of gas pipelines in total.

The Czech government has pushed for greater control of the energy infrastructure amid the energy crisis and the Russian full-scale invasion of Ukraine in February 2022. In September, it cleared the purchase of natural gas transmission system operator Net4Gas by state-owned power grid operator CEPS after Gazprom stopped paying Net4Gas last January.