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CEZ Rises 1st Day in 4 as CEO Calls for Improved Project Bids

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April 8 (Bloomberg) -- CEZ AS, the biggest Czech utility, climbed for the first time in four days as Chief Executive Officer Daniel Benes told Euro magazine bidders for its Temelin nuclear plant needed to make better offers.

The stock, the most-heavily weighted in the PX index, rose 1.4 percent to 574 koruna at 12:06 p.m. in Prague. The benchmark gauge added 0.1 percent.

CEZ asked Westinghouse Electric Co. and a Russian-Czech group led by Rosatom Corp. last month to improve their proposals to build two new reactors in a deal valued at $10 billion. Both bids must be boosted “significantly” in terms of price and technical aspects, Benes said in an interview published today.

“In the current situation, when the prices of megawatt-hour of electricity is moving slightly above 40 euros, it is completely relevant to consider the economic side of the project,” Benes said in the interview. “Such thinking is our duty toward shareholders.”

Choosing between a U.S. and a Russian supplier is seen as a politically strategic decision in the ex-communist country, which depends on Russian imports for most of its energy. The Czechs currently buy 60 percent of their oil, 70 percent of natural gas and all of their nuclear fuel from Russia. Their six nuclear reactors are of Soviet-era design.

It’s not clear that enlarging the Temelin plant makes sense, Foreign Minister Karel Schwarzenberg was cited as saying by Pravo newspaper on April 6.

“Cancelling the project, in our opinion, would be certainly positive for investors’ sentiment to CEZ shares,” Petr Bartek, an analyst as Ceska Sporitelna AS, said in a report to clients today.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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