Vattenfall receives bids from Czech firms for purchase of power business in Germany

17 March 2016 (Last Updated March 17th, 2016 18:30)

Vattenfall has received bids from two Czech firms for the sale of its coal mines and associated power plants totalling 8,000MW in Germany.

Vattenfall

Vattenfall has received bids from two Czech firms for the sale of its coal mines and associated power plants totalling 8,000MW in Germany.

The Swedish state-owned power company's plans for the sale was announced in 2014.

Coal miner Vrsanska Uhelna, part of Czech Coal, and privately held energy group EPH together with private equity group PPF Investments have submitted bids, Reuters reported.

The potential sale includes the company's lignite assets such as open-cast coal mines Jänschwalde, Welzow-Süd, Nochten and Reichwalde.

The sale also covers power generation plants Jänschwalde, Schwarze Pumpe, Boxberg and two blocks in Lippendorf in the Mitteldeutsches Braunkohlerevier.

EPH board chairman Daniel Kretínský said: "EPH is strongly committed to run Vattenfall's lignite operations in Lusatia sustainably and to the very benefit of the region and the employees.

"EPH is strongly committed to run Vattenfall's lignite operations in Lusatia sustainably and to the very benefit of the region and the employees."

"We strongly believe that our offer provides a compelling solution for lignite in Eastern Germany.

"We also offer to the seller a fair economic condition of the sale, respecting the real value of the assets and respecting liabilities attached to it."

The power plants employ a total of 8,000 people.

Kretínský added: "We also emphasise that we are fully mindful of current economic condition of Vattenfall´s lignite operations, including the fact that in the forthcoming years, unless the power prices will materially recover, the company will not be in a position to distribute any dividends and rather will generate a negative cash flow."

Czech firm CEZ announced its decision not to bid for Vattenfall's German assets, citing unfavourable development in wholesale electricity prices and uncertainty over early closure of coal power plants.

The company said it will consider other possible options and terms of the acquisition.


Image: Vattenfall-owned Jänschwalde power station in Germany. Photo: courtesy of Ra Boe / Wikipedia.