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CEZ CFO: firms and state in talks on liquidity back-up scheme

·1-min read

PRAGUE (Reuters) - Czech energy firms are in talks with the government on creating a loan scheme which would help cover their liquidity needs in case of extreme electricity price spikes, CEZ Chief Financial Officer Martin Novak said on Tuesday.

Power producers have faced needs to immediately supply cash to power exchanges to cover their open positions during price spikes.

CEZ said it needed over 100 billion crowns ($4.24 billion) at one point for the margin cover in early March. It said on Tuesday it had 57 billion crowns tied up in the system at the end of March.

"Discussion is underway with the government, all producers are involved, it would be on the basis of some direct loan. A guarantee is not enough, you need cash," Novak told Reuters and Bloomberg in an interview.

He said an extreme situation such as in case of commodity supply cuts could lead to temporary electricity price spikes that would boost the need for short-term cash.

CEZ said it sold some emission allowances in the first quarter and bought them back on forward markets to raise cash quickly for margin calls.

Novak also said the company expected to aim for the top of its 60-80% dividend payout ratio if it remains in strong condition after power prices and one-time effects boosted first-quarter profit.

He also said the company, which takes a small, unspecified amount of gas from Russia's Gazprom, would follow European guidance on gas payments to Russia, but gave no details.

($1 = 23.5870 Czech crowns)

(Reporting by Jan Lopatka; editing by Jason Hovet and Jason Neely)

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