01 JUN 2018 | Mergermarket shared Intelligence | Katka Krosnar
Czech electricity supplier Sev.en Energy plans to acquire gas- and coal-related assets in Western Europe, Executive Director Alan Svoboda said. It is studying more than five targets at present and hopes to complete at least one acquisition this year.
Sev.en Energy would like to hear about further potential targets, Svoboda said and is interested in coal- and gas-fired power stations, coal mines, and companies selling gas and power to end users.
Management is mainly interested in the United Kingdom, Germany, Italy, Spain and the Benelux region, he said, and in the United Kingdom, is specifically interested in gas-fired plants. The CZK 3.5bn (EUR 136m) turnover company could also look opportunistically at assets in other countries, and sees interesting possibilities in Greece, for example, he said, where the EU is pressurising the government to break the energy monopoly, as reported.
The company could invest up to several hundred million euros in a target, he said; it has EUR 1bn in equity to spend, and can also tap additional debt financing.
Sev.en Energy is participating in several tenders and is also in one-on-one negotiations, he said, declining to name the targets. It largely identifies potential candidates in-house, but also uses external financial and legal advisers as sources of market insights, he said, without further specifying. He did not name the advisers.
Sev.en Energy operates lignite mines and a thermal power station in the Czech Republic, and is now looking to expand internationally, Svoboda said. Western Europe offers the greatest opportunities, largely due to political pressure to switch to renewable energy and dispose of classic energy sources, for example in Germany, he said.
The company reportedly placed a bid for some German coal-fired power plants belonging to French energy company Engie [EPA:ENGI]. It is bidding for two plants near Munich and Bremen, and for a 52% stake in one at Wilhelmshaven, which could sell for a few hundred million euros, according to the report.
Svoboda declined to comment on whether Sev.en Energy is bidding for the Engie assets.
Sev.en Energy operates lignite mines Vrsany and CSA in the North Bohemia region and a thermal power station in Chvaletice and employs more than 2,600 in the Czech Republic. Its EBITDA reached EUR 150m in 2017, Svoboda said.
In 2016, the company extracted more than 9.6m tons of brown coal and expects to generate 4.5 TWh of electricity in 2018. In 2017, its retained profit totalled EUR 284m, according to its website.
Sev.en Energy is owned by Czech businessman Pavel Tykac.
by Katka Krosnar in Prague