EPH and PPF Investments submit a binding offer for Vattenfall’s German lignite activities

16. 3. 2016

Energetický a průmyslový holding a.s. (EPH) and PPF Investments Ltd. (PPF), as a financial partner of EPH, today announced the submission of a binding offer for the lignite assets in Saxony and Brandenburg that are currently tendered by Vattenfall AB.

Daniel Křetínský, Chairman of the board of EPH 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. We embrace both the direction taken by the German Government under ‘Energiewende’ and the interest of the regions and employees. We strongly believe that our offer provides a compelling solution for lignite in Eastern Germany. We are looking forward to a coordinated step-by-step effort in close collaboration with federal and regional governments, trade unions, local communities and other relevant stakeholders. 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.”

EPH’s offer is built on the confidence that lignite will play a decreasing nonetheless important role as a bridging technology providing secure and the only domestic, non-intermittent supply with strong social benefits.

“We believe that our Binding Offer offers a fair and firm value for the Assets and clearly demonstrates our commitment to the transaction, the industry and the region. We also emphasize 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,” Křetínský said.

Vattenfall’s operations currently tendered include lignite open-cast mining Jänschwalde, Welzow-Süd, Nochten and Reichwalde as well as the power generation plants Jänschwalde, Schwarze Pumpe, Boxberg and two blocks in Lippendorf in the Mitteldeutsches Braunkohlerevier, representing installed capacity of 8000 MW, with total 8000 employees.

EPH’s offer envisages operating both MIBRAG and Vattenfall stand-alone in continuation of the current organisational set-up and under the current management.