COMPANIES AND INDUSTRIES [IntelliNews - Weekly Reports]

(IntelliNews - Weekly Reports Via Acquire Media NewsEdge) COMPANIES AND INDUSTRIESBulgarian Energy Holding plans to tap international markets in H1.

Bulgarian Energy Holding (BEH) plans to tap the international markets this year, aiming to optimise its capital structure and benefit from the favourable borrowing conditions, Severin Vartigov, financial markets expert at BEH, said on Tuesday, Jan 15. The company, which has no long-term debt on its balance sheet, has launched a procedure to get an international credit rating after many of its peers already took advantage of the favourable bond market, Vartigov told the Euromoney Central and Eastern European Forum in Vienna. The bond will be issued in the first quarter of this year or in the beginning of the second quarter, he said. The size of the issue will be determined within the next month and a half once BEH decides what projects it would finance. [In October 2012, CEO Mihail Andonov said that the proceeds from the bond would be used to finance loss-making subsidiaries - power grid operator NEK and natural gas supplier Bulgargaz.] Another major concern is whether the credit rating will receive an investment grade or get a lower evaluation. It is also still to be decided whether this will be a euro or US dollar bond. "Most probably if the need for capital is lower and the credit rating we're going to get is BB+, we'll focus on the euro market," Vartigov said. Otherwise, he added, the better option is to get advantage of the liquidity provided by the US market.

BEH was set up in September 2008 and comprises natural gas supplier Bulgargaz, natural gas transmission utility Bulgartransgaz, the telecom arm Bulgartel, the country's power grid operator NEC, the nuclear power plant in Kozloduy, thermo-power plant Maritsa East II, and coalmine Maritsa East.

Bulgarian fuel trader Petrol buys back EUR 68mn worth of its Eurobonds Bulgarian fuel trader Petrol (5PET) said it has repurchased an aggregate principal amount of its Eurobonds equal to EUR 68,379,000. The company bough-back a principal amount of notes equal to EUR 55,166,000 in December 2012 and EUR 13,213,000 in January 2013. Prior to the buy-back the outstanding principal amount of the notes was EUR 87,038,000 as in September 2011, the company made its first buy-back equal to EUR 11,779,000.

The EUR 100,000,000 Eurobond was issued in 2006 to finance working capital needs and investment projects. It had a 5-year maturity but following two shareholders' meetings (in October and in December 2011) the maturity date of the outstanding notes was extended to January 26, 2017 - a move that Fitch and Moody's defined as a distressed debt exchange. The bond carries a fixed annual coupon of 8.375%.

Petrol has used a bank loan to finance the buy-back, investor.bg reported. The company posted a BGN 34mn loss in Jan-Sep 2012 against BGN 0.357mn profit a year earlier and its share price dropped by 29% in 2012. Petrol Holding currently owns 55% in Petrol, a 42% belongs to Naftex Petrol and 3% are in the hands of minority shareholders.

Bulgarian Posts to seek financial aid from state Preliminary results indicate that Bulgarian Posts ended 2012 with a loss, the CEO of the state-owned company, Deyan Dyneshki, said for Focus News. In 2011, the postal operator registered negative result amounting to BGN 9.2mn. Dyneshki blamed the company's losses on the recent liberalisation of the postal market that resulted in a sizable decline of prices from postal services due to increase of competition. We remind that the company's monopoly on delivery of letters of up to 50 grams expired at the end of 2010, after the government voted to liberalise the country's postal market as of 2011, in line with an EU directive that stipulates full liberalisation of postal markets in member states by the end of 2012. Bulgarian Posts has an important social role as it employs over 5,000 people throughout the country. Therefore, the company plans to seek financial support from the state in 2013.

Bulgarian cigarette maker Bulgartabac could acquire Bosnian peer by mid-Feb The majority owner of Bosnian cigarette maker Fabrika Duvana, Nebojsa Antonic, and executives of Bulgarian peer Bulgartabac have agreed to sign a preliminary contract on the takeover of the Banja Luka-based factory by the end of January, news agency Srna reported, quoting unnamed sources. The two parties met in Belgrade last week and agreed that the Bulgarian investor might enter Fabrika Duvana by mid-February. According to the report the works and trade union representatives of the Bosnian factory are happy with the deal and expect the working process to normalise soon after a two-year decline.

Bulgartabac sent a letter of intent to Antonic and the government of Bosnia's Serb Republic, where the factory is located, last year, declaring its desire to take over the company, keep its workers and continue its production.

Bosnian firm Antonic Trade, owned by Antonic, bought 55% of Fabrika Duvana Banja Luka in September 2006 for BAM 2.1mn (EUR 1.1mn). In October 2011, the government launched a legal procedure asking for compensations of BAM 4.3mn and termination of the privatisation contract as the company faced heavy losses and liquidation.

Three companies intend to bid for 7th digital TV network permit in Bulgaria Three companies have informed the state communications regulator about intentions to participate in a tender for issuing of one (seventh) permit for construction of a digital television network, according to a note posted on the website of the regulator. The companies are DVBT AD, Bulsatcom and Dinamiks EOOD. In December 2012, the communications agency announced plans to call a tender for a seventh licence to broadcast digital television. So far, it has held three such tenders in 2009, when two licences were issued to Slovakia's Towercom and another four - to Latvian Hannu Pro.

Bulgarian TPP Maritsa 3 to issue EUR 2.56mn debut bond Bulgarian TPP Maritsa 3 said it would issue a BGN 5mn (EUR 2.56mn) debut bond, following a shareholders' approval to proceed with the offering. The bond will carry an interest rate of 6.5% and will mature in 60 months.

TPP Maritsa 3 is a 120 MW coal-fired plant, located in the southern town of Dimitrovgrad. Its stock is trading on Bulgarian Stock Exchange (6TM) although it is one of the least liquid ones (last trade was in 2009). It is controlled by local businessman Hristo Kovachki who has substantial interest in the energy sector and who is under investigation over sizable tax liabilities to the state. The equity of TPP Maritsa 3 was a negative figure (BGN 3.1mn) as of end of September 2012 and the plant posted a BGN 2.2mn loss in the period from January to September last year.

Bulgarian seaside airports post increased passenger traffic in 2012 Germany's Fraport said the passenger number at Bulgaria's two seaside airports increased in 2012. Varna Airport, which was closed for runway rehabilitation in the period from October 2011 to February 2012, posted a 3.4% growth of the number of passengers serviced last year. The passenger number at Burgas airport increased at a higher rate - by 5.6% partly on the back of transfer of flights to Burgas during the period Varna airport was closed. Fraport Twin Star Airport Management, a 60/40 joint company of Fraport and local BM Star, operates Varna and Burgas airports under a 35-year concession contract signed in 2006.

Bulsatcom pays EUR 9.7mn for Bulgaria's fourth GSM licence.

Bulgarian satellite TV provider Bulsatcom has been granted a mobile phone licence on Friday, January 11, Mediapool reported. Thus the company will compete on the local market of mobile services with Mtel, Globul and BTC. The information has been officially confirmed by the communications regulator. The 10-year licence to use the frequencies in the 1,800 Mhz range cost BGN 19mn (EUR 9.7mn). Bulsatcom plans to start offering mobile services to clients by the end of 2013.

Privately held Bulsatcom is the largest satellite TV provider in the country. It is currently in a commercial dispute with two national TV channels - bTV and TV7, over raised fees and competitiveness issues. As a result the operator stopped broadcasting the two channels. Meanwhile, offices of TV+ channel, related to Bulsatcom, were raided by police over tax fraud suspicion in an act that many linked to the ongoing dispute, backstage affiliations with government and business interests.

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