Czech EPH to Group Infrastructure Assets

Czech energy investment group EPH will group its central European infrastructure assets under an arm called EPIF, and may sell a minority stake in the business through an initial public offering (IPO), EPH said on Thursday.

The privately-held EPH, which has grown rapidly in the past several years into one of central Europe's biggest energy groups with assets of 10.26 billion euros ($11.4 billion) in 2014, has infrastructure businesses including gas transmission, distribution and storage and distribution of heat and power.

It also owns power plants and lignite mines.

"The (EPIF) company is expected to become the most important business unit of EPH," the firm said in a statement.

"EPH as EPIF's sole shareholder is reviewing strategic alternatives for the disposal of a minority stake in EPIF, including an initial public offering."

The firm did not disclose who was advising it on the reorganisation plan or give any time frame for the possible sale or IPO.

EPH holdings include a 49 percent stake in the Slovak national gas transmission pipeline Eustream, which brings Russian gas from Ukraine to Austria and beyond as well as reverse flows from Europe to Ukraine. It also holds stakes in Slovak and Czech gas storage and Slovak gas distribution assets.

It owns a 49 percent stake in Stredoslovenska Energetika, an electricity distribution firm supplying central Slovakia, as well as municipal heating assets in the Czech Republic.

EPH had revenue last year of 3.66 billion euros and earnings before interest, tax, depreciation and amortisation of 1.39 billion. Net attributable profit was 187 million euros.

Disposal of a minority stake in the infrastructure business would generate cash for EPH for further expansion.

The company, owned by financier Patrik Tkac, EPH chairman Daniel Kretinsky and private equity structures of Czech-Slovak financial group J&T, has been an aggressive bidder for power assets across Europe.

It is in exclusive talks with Italy's Enel to buy a majority stakein the main Slovak electricity producer Slovenske Elektrarne and has shown interest in German lignite power plant and mines portfolio being offered for sale by Sweden's Vattenfall, along with a fleet of hydro plants.

(Reporting by Jan Lopatka)