France's Dalkia International has confirmed its interest in acquiring Sofia heating utility, which is in tatters after being drained to the brink of bankruptcy.

"We stepped on Bulgaria's market with the acquisition of the heating utility in the coastal city of Varna to get acquainted with the situation in this area. But we have never planned to stop there and are keen to develop many projects," said Reno Capris, CEO of Dalkia Bulgaria.

He stressed that privatization of Toplofikatsiya Sofia is not the only option for cooperation and the company is willing to consider getting a concession too.

Despite Dalkia serious interest in Sofia heating utility, no negotiations have been held so far.

Dalkia International signed the agreement for the acquisition of 100% stake in Varna heating utility shortly after Bulgaria joined the European Union in 2007.

The French bidder emerged as preferred buyer with an offer of EUR 6.78 M for a total of 39,648 shares of Toplofikatsiya Varna EAD. Second came the offer of UK's ENER-G PL estimated at EUR 6,200,026.

Dalkia also ran for the tender sale of 100% stake in Russe heating utility, northern Bulgaria, but was outbid by Slovenia's Holding Slovenske Elektrarne (HSE).

Prior to the local elections last year, opposing runners for the office of Sofia mayor agreed that the ailing and indebted Sofia heating utility should be municipality-owned as a guarantee that there won't be any problems.

"This is a company that serves the citizens of Sofia, so it is proper for it to be municipality-owned," Sofia mayor Yordanka Fandakova, who was eventually reelected for a second term on the ticket of the ruling center-right GERB party, said in an interview for Darik radio.

She stressed that the previous Socialist-led government almost forcefully took over the company from the municipality, after which it got it back but along with its huge debts and is now trying to put it back in shape.

"We know that the company has to work a lot to regain the trust of its clients, but anyway it has to be owned by the municipality," she added.

Meanwhile Vladimir Karolev, Sofia municipality council member from the centrist NDSV and failed runner for Sofia mayor on the ticket of his party, reiterated his opinion that the only solution to the utility problems is its privatization.

According to him the company is technically speaking bankrupt because its short-term takings are smaller than its obligations.

Heating utility Toplofikatsiya Sofia was transferred back to the municipality along with its debts, exceeding BGN 510 M, in the middle of 2010.

Until 2008 Sofia municipality was a majority owner of the plant, while the economy ministry held a 42% stake.

Toplofikatsiya Sofia returned to the government in 2008 when Bulgaria's largest municipality transferred a 58.2% stake in a bid to curb debts.

Sofia mayor Yordanka Fandakova has repeatedly insisted that despite the poor state of the company, its transfer back to the municipality is the best option. Those who support her say that should the operations of Toplofikatsiya Sofia be suspended, the electricity grid of the country will be overburdened.

Toplofikatsiya Sofia, which has been in the news for more than three years after it was found drained to the brink of bankruptcy, provides heating to about 400,000 households in the capital Sofia.

Plans for its sale, considered to be one of the country's last big energy privatization deals, have all collapsed so far.