ČEZ General Meeting: Dividend Proposal and Shareholder Discussions

Title: ČEZ General Meeting to Discuss Dividend Proposal and Taxation Concerns

Date: June 26, 2023

The general meeting of ČEZ, the Czech electricity producer, is set to take place on Monday, June 26, at the Prague Congress Center. Shareholders who held the company’s shares in the central registry (CDCP) as of June 19 are eligible to participate in the meeting. The meeting is expected to be lively and lengthy, primarily due to discussions surrounding this year’s record dividend and the significant taxation burden on CEZ’s business.

One of the key topics of discussion will be the proposed dividend amount. The Ministry of Finance (MoF) has put forward a counter-proposal suggesting a dividend of CZK 145 per share. ČEZ has stated that it has the financial capacity to cover this larger dividend, but it also highlights potential risks such as unfavorable market conditions and margin deposit obligations on exchanges. The company also raises concerns about the negative impact on its credit rating and the potential limitations on future financing availability.

Another shareholder, Petr Kalivoda, has proposed a dividend of CZK 160 per share. However, his proposal contains factual errors regarding the total dividend amount. Despite this, Kalivoda justifies his proposal by referring to CEZ’s previous dividend policy of paying 80-100% of adjusted consolidated profit. The board of directors, however, has rejected Kalivoda’s proposal, citing its factual incorrectness, vagueness, internal contradiction, and unenforceability.

The Ministry of Finance’s proposed dividend of CZK 145 per share is considered legally valid and will be included in the meeting agenda. ČEZ acknowledges that the proposed increase in the dividend payout will have a negative impact on the company’s liquidity and reserves. However, the board of directors does not view this proposal as a threat to the company’s financial stability in the medium or long term.

It is important to note that the board’s proposals are typically given priority in voting due to the Ministry of Finance’s 70% share in ČEZ. The decisive date for claiming the dividend remains June 30 in the CDCP.

The general meeting will provide an opportunity for shareholders to seek clarification from the company’s management regarding the taxation concerns and the reasons behind their stance on dividend proposals. The outcome of the meeting will shape the dividend payout and future financial decisions of ČEZ.

Jiří Zendulka, a finance expert with extensive experience in the industry, has been following and analyzing the developments surrounding ČEZ and is expected to provide insights on the meeting and its implications.

Overall, the ČEZ general meeting will be a significant event for shareholders and stakeholders, as it addresses crucial issues related to dividend proposals, taxation, and the company’s financial stability.

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Tential need for additional borrowing to meet the increased dividend payout.

Another important aspect that will be addressed at the general meeting is the issue of taxation. ČEZ has expressed concerns about the significant taxation burden it faces, particularly in relation to the dividend payment. The company believes that the current tax policy places a disproportionate burden on ČEZ and hinders its ability to attract investors and remain competitive in the market. The management and shareholders will discuss possible strategies to address this issue and advocate for a more favorable tax environment for the company’s operations.

In conclusion, the forthcoming general meeting of ČEZ will focus on two main topics: the proposed dividend amount and the taxation concerns affecting the company. Shareholders will engage in discussions to determine the appropriate dividend payout considering potential risks and the impact on ČEZ’s credit rating. Additionally, the meeting will provide a platform for addressing the taxation burden and exploring ways to create a more favorable tax environment for the company.