Bulgaria Business Calls for Stake Sale in Energy Monopolists

Energy | March 9, 2010, Tuesday // 12:16|  views

The Bulgarian Energy Holding was created in 2008 with the merger of five state-owned companies. Photo by BGNES

Bulgaria's government has been urged to sell on the stock exchange shares in companies, which are part of the Bulgarian Energy Holding, in a bid to put the local capital market back on track.

“The sale of minority state-owned stakes in the energy companies Bulgartransgaz, Kozloduy nuclear power plant, the National Electricity Transmission Company, Bulgargaz and Maritza Iztok through an initial public offering (IPO) will be a catalyst for the restoration of the capital market in Bulgaria," says a letter to the country's Prime Minister Boyko Borisov, sent by representatives of business organizations, linked to the stock and financial markets.

According to them this will be the most efficient method for privatization, which will bring fresh money into the budget.

“Bulgaria is one of the few European countries, which have not listed on the stock exchange stakes in energy monopolists,” the letter says.

Last week Bulgaria scrapped a plan to sell shares in Bulgartransgaz, the state-owned natural gas storage and transmission company, and as much as 15% in the National Electricity Transmission Company.

Meanwhile the Economy and Energy Minister Traicho Traikov said preparations have started on the sale of the state’s 35% stake in the seven distribution companies run by Prague-based CEZ AS, Germany’s E.ON AG and EVN AG.

Bulgarian Energy Holding, which groups the country's top energy assets, was set up in 2008 by the previous Socialist-led government in a bid to strengthen the country's position on the European power market and manage major energy projects Bulgaria has committed to, including Belene nuclear power plant, Nabucco and the South Stream gas pipelines.

The holding was created with the merger of five state-owned companies - the National Electricity Company NEK, the gas monopoly Bulgargaz, the Maritza Iztok Mines, the Maritza Iztok 2 Thermal Plant, and the Kozloduy Nuclear Power Plant into a EUR 4 B energy giant.

It is a sole owner joint-stock company with a 100% Bulgarian state ownership.

The new center-right government of GERB party, which swept the July general elections last year, subjected the Bulgarian Energy Holding to financial checks to find out how the money poured into it for raising its capital has been used.

At the end of August last year it announced plans to dissolve the mega-structure only to abandon them a few months later after cost reductions helped it cut its budget deficit.

Bulgaria is targeting a balanced budget this year.

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Tags: Bulgartransgaz, Kozloduy, National Electricity Transmission Company, Bulgargaz, Maritza Iztok 3


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