Bulgaria's Shumen municipality has warned the executive director of Israeli company Telemania that it will terminate the privatization contract for heating utility Toplofikatsia Shumen EAD at one month's notice.

According to a media statement on the website of the northeastern Bulgarian municipality, the Israeli company has violated its obligations under the privatization contract.

Telemania has failed to pay a sum of BGN 51 000, the difference between the price of the heating utility and the advance payment submitted by the company.

According to the statement of the Shumen municipality, if the Israeli company fails to transfer the sum within a month or submit a bank guarantee, the privatization contract will be considered terminated.

Shumen's heating utility stopped functioning due to a debt of BGN 18 M to state-owned gas supplier Bulgargaz, leaving locals without central heating in the winter season 2012/2013, investor.bg reminds.

Under the privatization contract, which was announced on February 1, the buyer undertook to invest a total of EUR 75 M in three years, keep a staff of at least 50 employees, and settle or renegotiate the debts of the company to the state, the municipality, the municipal companies, and the heating utility's staff within three months after the signing of the deal.

The buyer of the heating utility also undertook to restore heating supply to the residents of Shumen for the 2013-2014 heating season at the latest.

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