Top 10 Stories in Bulgaria's Business in 2013
Since the downturn in 2009, when GDP growth contracted by 5.5%, Bulgaria has been trying, without success, to recover to its pre-crisis levels. In 2013 the country's economy is very likely to fail to reach its target of acceleration by 1%. Grim forecasts aside, see below the top 10 business headlines in 2013 – as we in Novinite.com (Sofia News Agency) saw them.
Bulgaria Takes Schuldschein Loan, Interest Ranges between 3.4%-4.6%
Bulgaria raised in December EUR 290 M Schuldschein loan in private placement to finance its budget shortfall, the interest ranging between 3.4%-4.6%. The government raised EUR 156 M in a 15-year loan with an average interest of 4.6%, EUR 103.5 M in a 10-year credit at 4.1% and EUR 30.5 M in a 7-year loan at 3.397%. Austrian and German institutional investors offered most of the EUR 290 M that Bulgaria raised in private placement Schuldschein loans. Deutsche Bank and Raiffeisen Bank International acted as arrangers of the Schuldschein loan, which is not well known in Bulgaria and is used to raise capital from both private corporations, municipalities and states.The loan agreement envisages three tranches of seven, 10 and 15 years paying fixed-rate interest rates. It was ratified by Bulgaria's parliament in November. Bulgaria and Deutsche Bank had initially agreed on a EUR 360 M Schuldschein loan to help service debt payments and increase fiscal reserves.
Bulgaria's Bansko - Europe's Cheapest Ski Resort
Bulgaria's ski holiday resort Bansko was named at the end of the year Europe's best value ski resort by TripAdvisor for the second year in a row. The resort was found to offer the best value when compared with 40 other ski destinations, based on typical one-day-visit ski costs plus food and drink. The costs amounted to just GBP 104 at Bansko. A similar day on the slopes at Courchevel in France - the most-expensive destination - was as much as GBP 432. Other bargain resorts included Sochi in Russia (where the one-day costs were GBP 137), Ordino Arcalis in Andorra (GBP 138) and Arinsal in Andorra (GBP 141). In contrast costs were as high as GBP 428 in St Moritz in Switzerland and GBP 404 in Meribel in France. The ninth least-expensive resort was the Cairngorms in Scotland where a one-day trip would set visitors back GBP 173. The survey covered the cost of one night's hotel accommodation, one day's ski pass, one day's basic ski hire, a meal and a bottle of beer for the ski season from December 15 2013 to April 15 2014. TripAdvisor spokesman James Kay said: "Eastern European destinations and Andorra offer the best value and, for those wanting to stay closer to home, it's great to see a Scottish ski resort among the 10 least-expensive destinations."
Standard & Poor's Downgrades Bulgaria Ratings
Standard & Poor's ratings agency affirmed in mid-December its long- and short-term foreign and local currency sovereign credit ratings on Bulgaria at 'BBB/A-2'. The outlook on Bulgaria's credit ratings has been downgraded from 'stable' to 'negative', citing weak economic growth prospects and a worrying political situation. In a statement, S&P said the 'negative' outlook indicated that there was at least a one-in-three possibility of lowering the ratings within the next two years, if the political environment deteriorates, weighing on already-weak growth prospects. According to the rating agency, Bulgaria's growth prospects are being challenged by anemic domestic demand, resulting from low credit growth, constrained investment growth and still-high unemployment, as well as by the complex political climate, which could slow reforms. S&P agency stated that the GDP actual growth for the period 2010-2012 (approximately 1%) was affecting the outlook downgrading thus preventing the country's development prospects. The agency also noted that the level of net government debt was expected to remain low amounting to 15% of GDP in 2016. S&P confirmed the government's ability to meet deficit targets for the period 2014-2016. The evaluation of the ability to maintain the stability of public finances is an essential for the credit rating and it has been validated.
Bulgaria, Westinghouse Ink Deal on Kozloduy NPP
The state Bulgarian Energy Holding (BEH) and US company Westinghouse inked in mid-December a deal for coordination of parameters for a new reactor at Bulgaria's Kozloduy NPP. The contract was signed by BEH representatives and Westinghouse CEO Danny Roderick in the presence of Bulgarian PM Plamen Oresharski in Sofia. Westinghouse CEO Danny Roderick said his company is committed to efficiently and transparently complete the project, which he views as highly positive for Bulgaria's economic growth and energy security. The decision to negotiate with Westinghouse on the planned new Unit 7 of Kozloduy NPP was formally adopted by the Bulgarian cabinet after plans for that were announced over the fall.
Bulgaria's Vivacom Issues Bonds for EUR 400 M
The Bulgarian fixed line and wireless operator Vivacom has issued bonds for EUR 400 M to refinance its existing obligations. Vivacom, which was formerly known as BTC, listed the bonds on the Irish Stock Exchange (ISE) for a five-year period.Credit Suisse (B&D) and VTB Capital Bank acted as coordinators for the deal, while Barclays and Deutsche Bank - intermediates and Societe Generale - co-manager of the listing.
Bulgaria MPs Ok 20% Renewable Energy Tax, Defy Protests
Bulgaria's parliament approved conclusively at the beginning of December a highly controversial new tax on revenues of renewable energy producers amid a wave of protests against it. The proposal to introduce a new 20% tax on the revenues of photovoltaic plants and wind farms through changes to the Renewable Energy Sources Act was submitted by Volen Siderov, leader of nationalist party Ataka, during the second-reading vote on Budget 2014 by the parliamentary committee on budget and finance. On Saturday, representatives of the Bulgarian Socialist Party (BSP) and liberal party Movement for Rights and Freedoms (DPS) announced that they would back the measure in Parliament. In a media statement, the Ministry of Economy and Energy (MIET) defended vehemently the proposal citing the Czech Republic as an example, where the tax rate on preferential prices there amounted to 26-28%, while in Greece - to 30%. MIET informed that Italy, Spain, Romania and the UK had also introduced measures to reform the support schemes for renewable energy. Meanwhile renewable energy producers have staged numerous protests against the proposed tax.They have complained that many of them had developed their businesses through loans from banks and the imposition of such a tax on their turnover would substantially complicate their situation.
Bulgargaz CEO Surprisingly Released From His Post
Dimitar Gogov, CEO of state-owned gas supplier Bulgargaz has been released from his duties by The Bulgarian Energy Holding (BEH) at th beginning of November. The decision for his departure was made by The Bulgarian Energy Holding (BEH), an enterprise which brings together all state-owned energy companies. Gogov was replaced by Shishman Chaushev, former director of regional National Revenue Agency branch.
Bulgaria's BEH Raises EUR 500 M from Bond Issue
Bulgaria's state energy holding company BEH has raised EUR 500 M, the company announced on November 1 as the early signing for its bond issue on international market was wrapped up. The company initially planned a EUR 250 M bond issue, needed to refinance debt which matures in May. The bond issue, which will cover the bridge financing, is for five years with an interest rate of 4.287%. BEH was incorporated in 2008 with a decision of the then ruling Socialist-led government. BEH EAD is a shareholding company with 100% state owned participation. The Holding includes Mini Maritsa Iztok EAD, Maritsa East 2 TPP EAD, Kozloduy NPP EAD, NEK EAD, Electricity System Operator EAD, Bulgargaz EAD, Bulgartransgaz EAD and Bulgartel EAD. All companies, brought together in the holding structure, preserve their operational independence and licenses, as they are all owned and directly subordinated to the corporate center BEH EAD. The Bulgarian Energy Holding EAD is one of the largest companies in the region, and national energy leader. Bulgaria tapped last summer international markets to raise funds to repay the first tranche of about EUR 835 M (USD 1.07 B) in 11-year Eurobonds, which matured on January 15, 2013.
South Stream Groundbreaking Ceremony Held in Bulgaria
A groundbreaking ceremony for the Russian-sponsored gas pipeline project South Stream was held on October 31 at site of the Bulgarian compressor station "Rasovo." The village of Rasovo is in northwestern Bulgaria in the minciplaity of Medkovets, Montana region. The ceremony was attended via video link from the building of the Council of Ministers in the capital Sofia by the CEO of Russian energy giant Gazprom, Alexei Miller, the Prime Minister of the Republic of Bulgaria Plamen Oresharski, the Minister of Economy and Energy of Bulgaria, Dragomir Stoynev, and the Energy Minister of the Russian Federation, Alexander Novak. The construction of the Bulgarian section South Stream gas pipeline was officially launched on Thursday after a meeting of over four hours between Miller and Oresharski. A year ago the previous center-right government of Boyko Borisov signed signed with Russian state-owned energy giant Gazprom the final investment decision for the construction of the South Stream gas transit pipeline. The South Stream agreement was signed in the Bulgarian capital Sofia on November 15, 2012 by former Bulgarian Prime Minister Boyko Borisov and Gazprom CEO Alexei Miller, in addition to another agreement for the Russian natural gas supplies for Bulgaria, which stipulates a 20% discount as of January 1, 2013.
The South Stream pipeline is intended to transport up to 63 billion cubic meters of natural gas to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine. The pipes will go from Russia to Bulgaria via the Black Sea; in Bulgaria it will split in two – with the northern leg going through Serbia, Croatia, Hungary, and Slovenia to Austria and Northern Italy, and the southern leg going through Greece to Southern Italy. The Black Sea underwater section of South Stream between Russia and Bulgaria will be 900 km long, and will be constructed at a maximum depth of 2 km. In order to service the supplies for South Stream, Russia will expand its own gas transit network by building additional 2 446 km of pipelines with 10 compressor stations with a total capacity of 1473 MW, a project to be called "South Corridor" and to be completed in two stages by 2019. The pipeline's core shareholders include Gazprom with 50%, Italy's Eni with 20% and Germany's Wintershall Holding and France's EDF with 15% each. Gazprom has already established national joint ventures with companies from Austria, Bulgaria, Croatia, Slovenia, Greece, Hungary and Serbia to manage the onshore section of the South Stream pipeline.
The opposition right-wing Democrats for Strong Bulgaria (DSB) party recently slammed the South Stream gas pipeline project as the "second huge corruption-ridden project of the Bulgarian Socialist Party (BSP), the Kremlin and the energy mafia." To illustrate their point, DSB members pointed out that Bulgaria was not going to receive any money at all for 15 years in a row and all revenues generated by the gas pipeline during the period would go to Russian energy giant Gazprom.
Forbes Names Banker Tsvetan Vassilev Most Influential Bulgarian
The Bulgarian edition of Forbes Magazine has unveiled its ranking of the top 50 most influential persons in the country, the list being topped by banker Tsvetan Vassilev. Tsvetan Vasilev, director of the Corporate Commercial Bank, is followed by Ahmed Dogan, honorary lifetime leader of Bulgaria's liberal, predominantly ethnic Turkish party, DPS. Ivo Kamenov, Marin Mitev, Tihomir Mitev, owners of Chimimport consortium, come in at the next three spots. Bulgarian Socialist Party leader and PES President Sergey Stanishev is ranked sixth in the list, followed by media mogul and member of parliament Delyan Peevski. Forbes Bulgaria has stated that its criteria for the top 50 most influential Bulgarians are the same as those for its world top 30: number of people over which the person in question has power, the amount and kind of resources at his or her disposal, and the degree of active change he or she effects on the country. Among the 50 persons singled out by Forbes to be most influential for Bulgaria at the present moment are 28 politicians, 20 business people and 2 NGO representatives.
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Yeah Piccadilly Circus, (I guess the real meaning of it with the clowns, not the Latin “circle” meaning…) (nice street in West London)
Anyways I see you are having lots of fun with BG but my intentions here are not to blame the current government on all BG “misfortune” which will be an erroneous and unfair statement. Like I said in my previous post Bulgaria has been in this social and economical lag for centuries.
In its present condition of a EU member Bulgaria is in a state of an increasingly “addictional” and institutionalized monetary dependency.
Just look at them analyzing who got more funds and where….
Anyways Bulgaria doesn’t need much, it is a small country and should try to focus its trade on the rapidly growing future markets like the BRIC countries and many others. The same BTW goes for the entire EU because this is the only way out for the heavily indebted Western economies. Then again like it or not it will happen sooner or later because this is the only option for prosperity!
Yet again you come onto this forum to run down the achievements of this government which is a disgraceful. PM Oresharky and his regime headed by Mr Stanishev, Mr Mestan and Mr Siderov have done an amazing job during their first six months in power - they have created millions more jobs, completed thousands of kilometers of road projects to the highest standard, banished poverty, stopped corruption, reformed the judiciary whilst getting billions of dollars in overseas investment for Bulgaria. Decadent imperialists like you will do anything to try and stop the revolution that is currently underway in favor of your failed reactionary, backward political ideals.
For quite few centuries already Bulgaria has been out of time and out of touch with the leading realities. This tradition obviously has firm grip on the Balkan psyche even until the very present days.…
All Balkan nations should try really very hard to realize and focus on the present trends, tendencies and actualities in the global economics. Try to position yourselves for growth and opportunities and to attract the right potential investors. Focus on the high growth markets. The global markets presently are so interdependent that every percentage of GDP growth in a “developed” marked like the US or the EU will inevitably trigger multiple percentage growth of GDP in the “Emerging” high growth markets.
It’s a very different world out there, have a very good look at it!
and so on and so on and so on…..