September 21, 2018 / 5:18 PM / 3 months ago

Bulgaria's Inercom divests solar power assets to save CEZ deal

* Inercom divests photovoltaic business to clear obstacles

* Regulator blocked deal on due to likely dominant position

* Inercom expects quick reaction from regulator

SOFIA, Sept 21 (Reuters) - Bulgarian energy producer Inercom said it has divested its solar energy business to clear regulatory objections to its takeover of the Bulgarian assets of Czech utility CEZ.

Bulgaria’s Commission for Protection of Competition said in July the deal could help Inercom establish a dominant position in the country, hurting competition, as the company already has several photovoltaic (PV) projects in southern Bulgaria.

“A restructuring was carried out within Inercom Group, as a result of which the companies producing electricity from photovoltaic power plants are not part of its portfolio,” Inercom said in a statement on Friday.

It added that it expects a quick reaction from the regulator.

The Commission for Protection of Competition said it needed time to consider Inercom’s statement.

In February CEZ signed a contract to sell a power distributor that provides electricity to more than three million Bulgarians, together with other assets in the Black Sea state, to Inercom for an estimated 320 million euros ($375.49 million).

The deal, however, prompted concerns that strategic energy assets in the European Union country were passing into the hands of owners about which little was known, and also raised worries about financing for the deal.

With assets worth around 100 million levs ($60.03 million), little-known Inercom would have acquired a business with annual turnover of about levs 1.8 billion levs ($1.08 billion), which operates one third of Bulgaria’s power grid.

Energy prices are politically sensitive in the EU’s poorest member state. A spike in electricity bills in 2013 toppled Prime Minister Boyko Borissov’s first government. ($1 = 0.8522 euros) ($1 = 1.6659 leva) (Reporting by Angel Krasimirov, editing by Louise Heavens)

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