PRAGUE, April 24 (Reuters) - The Czech government welcomes a plan by 70% state-owned electricity producer CEZ to spin off its distribution and other non-production assets and offer a minority stake in them to investors, Industry and Trade Minister Karel Havlicek said on Friday.
Havlicek told reporters the plan would generate cash for the government's plan to subsequently take over full ownership of CEZ's production business through a buyout of minority shareholders that would not harm their rights, burden the state budget or significantly hurt CEZ's cash flow.
CEZ is one of Europe's largest electricity utilities with a market capitalisation of $31 billion.
The government, which took office late last year, has made taking control of at least its production operations a priority.
"Yesterday's decision corresponds to our aim. We welcome it, and without doubt it is the first step for it to be achieved," Havlicek told reporters.
The plan will be discussed at CEZ's annual meeting on June 1 and, with government support, should be approved.
Havlicek said he expected the utility to float the minority - CEZ put it at up to 49% - of the spun-off assets including customer sales, trading and power distribution on the Prague Stock Exchange, keeping a large piece of CEZ listed while the parent firm would eventually be taken off the market.
CEZ said on Thursday a direct sale was also an alternative, while spinning off the mostly regulated assets, such as power and gas distribution, would raise interest from a broader range of investors.
Havlicek said the government was not yet discussing the planned buyout with CEZ's minority shareholders but said they would be given fair treatment.
Reporting by Jan Lopatka; Editing by Joe Bavier
Source: Reuters