불가리아 주요 경제뉴스 (20 – 27 JULY 2007)

BULGARIAN ECONOMIC TOP NEWS DIGEST
 (20 – 27 JULY 2007)

 

Sections/headline briefs:

MACROECONOMY:

Energy projects vie for � 727 mln financing
10 banks to syndicate � 250 mln loan for Bulgarian nuke plant
Municipalities vie for industrial zone financing
Burgas company to build new commercial port
Varna gets Bulgaria's first private petroleum products terminal
� 500 mln for roads repair
Construction of Varna-Burgas motorway to start '08
Grain producers in crisis
Ministry of Agriculture: No grain crisis in Bulgaria
Every fifth Bulgarian contracted three bank loans
Bulgarian banks hand out BGN 200 mln in home loans June
Bulgaria`s population will fall by 30 per cent by 2050
EIU: Economic indicators in Bulgaria to weaken through 2011
Foreign tourists spend � 500 million in Bulgaria
A 6.2% growth of Bulgaria's economy expected next year
Bulgaria, Romania to join European Economic Area
USAID, Bulgarian NGO representatives sign financing deal
The voluntary insurance sector to manage BGN 2 billion
EU to license Bulgarian dairy farms, slaughterhouses once in 2 months

 

 

INVESTMENTS:

Ten candidates are ready to invest in a waste treatment plant
Machine components maker to invest up to � 10 Mln in Ruse
Varna hosts renewable sources investment forum
Orchid Developments to invest � 100 mln in Varna mall.
Varna Towers to invest BGN 85m in Bulgarian Mall
EVN to invest BGN 9m in Bourgas region
Estonian company Arco Vara To Invest � 24 mln in Sofia Project
Ocif, Israel Theaters buy Ruse lot for shopping mall scheme
Tchugunoleene to invest some � 4 mln
Equest Balkan Properties plans further investment in Bulgaria and Romania
Italian-led JV to build � 80 mln yacht marina in Ahtopol
Fitch affirms Bulgaria's credit rating at "BBB"
Engel, Heitman to invest  � 30 million in boutique apartments in Sofia
SEEF II to invest USD 320 mln in the region

 

COMPANIES:

Greece's Aikon buys plot in Super Borovets
Greek wholesaler Elgeka to distribute U.S. Kimberly-Clark's products in Bulgaria
Besa Valley boasts a collections of choice wines
Overgas Capital offers credit to bourse investors
Bulgargaz, OMV in Black Sea shelf drilling agreement
French Dalkia in talks to acquire four heating utilities in Bulgaria
Serbian company poised to buy Bulgarian supermarket chain
Devin offers 3m shares
Austrian company to acquire Sofia Mel
U.S. American Standard sells Bulgarian units to Bain Capital partners
Cypriot company to buy soft drink maker Agrima
Eurohold to raise � 220 mln for acquisitions
Odessos reports BGN 1 mln higher profit for H1
Bulgaria government grants BGN 2 mln to Hewlett Packard center
Former Bulgartabac company does well after going private
German`s Liebherr expands plant in Bulgaria

Articles:

MACROECONOMY:

Energy projects vie for � 727 mln financing

The Intelligent Energy - Europe programme will provide EUR 727 million grant financing for projects in the next six years. All Bulgarian companies and organisations can apply for funding, Zdravko Georgiev of the Association of Bulgarian Energy Agencies (ABEA) said. The programme is aimed at creating political and market conditions for energy efficiency and use of renewable energy sources, he added.
The average budget for a project under the programme will amount to EUR 1 million, the term for implementation should not exceed three years. As much as EUR 52 million worth of grants have to be absorbed in 2007. Project proposals will be accepted until September 28, 2007.The global annual turnover of renewable energy sources amounts to USD 20 billion, which makes it one of the most rapidly developing markets.
Applicants under the programme have to set up consortiums with companies and organisations from at least two other EU countries. The projects should also provide for co-financing worth up to 75% of the project value. Purchase of equipment is not covered by the grants.

10 banks to syndicate � 250 mln loan for Bulgarian nuke plant

Ten banks, including two already operating on the Bulgarian market, will syndicate a 250 mln euro loan for the construction of a new 2,000MW nuclear power plant (NPP) at Bulgarian Danube town of Belene, Dnevnik wrote. Two months ago, France's BNP Paribas was picked as the winner of the competition to provide loan-financing for the project. The competition was invited by Bulgarian national power grid operator NEK. BNP Paribas is expected to name its syndicate partners this week and give details on the terms of the loan, said NEK. The BNP Paribas loan will finance the design, equipment delivery, construction and assembly costs for the first year of the Belene project.
Municipalities vie for industrial zone financing
Municipalities in 26 regions of Bulgaria have presented projects for development of industrial zones on their territory, the ministry of regional development said. The project is financed under the PHARE programme and by the state. As much as EUR 1 million will be provided for the first stage and EUR 18 million for the second one. The state cofinancing will total EUR 4.5 million.The interest is huge, nearly all regions submitted documents by the July 18 deadline, the ministry said. The offers will be unsealed after a commission is appointed to assess them. The final results will be clear in late November.
The long-term goal of the project is increasing foreign and local direct investment, while the short-term objective is improving infrastructure. The aim is to create at least 16 industrial zones. 

 

Burgas company to build new commercial port
KRZ-Port Burgas AD, 92%-owned by Industrial Holding Bulgaria, said it will implement a BGN 23 mln  project for a new commercial port in the city of Burgas, on the Black Sea. The company will extend westwards by 180 m an existing quay wall, creating an expanded port with a 3 ha area. The project, which will create three new berths each 125 m long and 11.5 m deep, should be completed in three years. The western end of the new port will be allocated for grain cargo while the remainder will handle general cargo. The EBRD will be involved in the project financing.
Varna gets Bulgaria's first private petroleum products terminal
Prista Oil, the Bulgarian lubricants maker, and its subsidiary Marine Anti-pollution Enterprise (MAPE) will invest around EUR 7 mln in a port for petroleum products in Varna, on the Black Sea. MAPE managing board chairman Milen Boichev and the Varna mayor Wednesday broke ground for the facility.The private terminal, which will warehouse and ship refined base oils, will occupy a 2.9 ha site on the northern bank of the Varna lake. The port will dock tankers with up to 10,000 DWT and will offer sterile storage and reloading.The capacity of the terminal in the first three years of operation will be 50,000 to 100,000 tons and is planned to reach 150,000-200,000 tons in a decade. Boichev said the investment will be recouped in up to a decade. At the end of the period, Prista Oil and MAPE intend to transform eh facility in a logistics center servicing the whole region south of Odessa where the Bulgarian lubricants maker opened a port terminal in 2004.The new Varna terminal should become a gateway for cargo traffic from the Middle East and the Eastern Mediterranean to Central and Eastern Europe.
� 500 mln for roads repair
About 500 million euro will be invested in the renovation of Bulgaria's road network this year. This sum is about twice bigger than the investment made in 2006, according to Bulgaria's Minister of Regional Development and Public Works Assen Gagauzov. The ministry considers variants for granting a concession for Cherno More motorway, intending to avoid all the misunderstandings characteristic of the contract for Trakia motorway. 
Construction of Varna-Burgas motorway to start '08

The Bulgarian regional development ministry said it is prepared to start in March 2008 negotiations on the award of a concession contract for the Cherno More motorway which links the Black Sea towns of Varna and Burgas. The route of the motorway is currently being particularised, said regional development minister Asen Gagauzov. According to one of the latest blueprints for the motorway, it was to be routed from Burgas through Kableshkovo, St Vlas, Bania, Obzor, Priseltsi and once having reached Beloslav was to link up with the Hemus motorway via a bridge facility. There is no working draft for the route so no details are available as of yet, said Gagauzov.

Grain producers in crisis
Bulgarian grain farmers are suffering the huge negative impact of bad climate and extreme heat.There is an extraordinary situation that is becoming worse, chairperson of the National Grain Producers Association Krasimir Avramov said at a meeting with the MEP Petya Stavreva, FOCUS News Agency reporter announced.Stavreva said that the association warned in May that serious losses in the grain industry are expected.We wanted to have a state of emergency declared, but Minister Kabil and the Ministry of State Policy for Disasters and Accidents denied the request.The ministries' reaction has made the situation worse and allowed the crisis to deepen, Avramov said.The damages this year are enormous, grain producers announced.
Ministry of Agriculture: No grain crisis in Bulgaria
There will be no grain crisis in Bulgaria as the bread balance for 2007/08 has been secured, the country's Deputy Agriculture Minister Svetla Bachvarova said on Sunday.
The total amount of wheat yielded this year is 2,200, 000 tons and this will secure the needs of the Bulgarian population. Still the amount is not enough so that none of it could be exported.The drought has destroyed around 185,000 decares of wheat this summer, Bachvarova added. Around 50% of the destroyed crops were in the Pleven town region.
If the temperatures remain extremely high in the next two weeks, the bigger part of the corn fields will also be destroyed, Minister Bachvarova warned.
Every fifth Bulgarian contracted three bank loans
About 20% of all eligible creditees have already obtained three or more loans from different banks, Bulgarian National Bank Deputy Governor Dimitar Kostov told the Bulgarian National Radio. Nevertheless credit conditions, in his opinion, are not to get less advantageous. Furthermore he said that by the end of the year the loan provision growth is expected to fall down to 35-40%. "After May 2007 the annual growth overreached 50% and we took measure to slow down its pace," he also added. on Thursday BNB raised banks' reservations minimums from 8% to 12% of the deposits. This will result in the banks' increasing the interest rates, because their resource's cost will rise. 

Bulgarian banks hand out BGN 200 mln in home loans June
The local commercial banks lent 195.7 mln levs to home buyers in June, shows data released by the Bulgarian National Bank (BNB).June was in not way a standout. Domestic mortgage lending has been outpacing the other segments of the banking market since January, expanding by a fourth in volume to 4.41 bln levs in H1.Consumer loans added 143.6 mln levs in June.The household loan total stood at 10.93 bln levs at end-June with growth slowing by a 1.5% wisp from the 40% rate clocked at the end of May. In contrast, corporate loans posted a growth of 53.8% at end the of June versus 49.1% at the end of May. The corporate loan total now stands at 17.79 bln levs or 34% of GDP. The share of bad and restructured household loans declined to 2.75% at end-June versus 2.86% at end-2006

Bulgaria`s population will fall by 30 per cent by 2050
Bulgaria’s population figures would decrease by 30 per cent by 2050, a report by investment fund Allianz Global Investors said.The countries of Central and Eastern Europe (CEE) were all facing serious demographic problems, but Bulgaria’s situation was the worst, the report said, as quoted by investor.bg. Bulgarian neighbouring country Romania will lose 20 per cent of its population by 2050, while population in Poland will drop by 10 per cent.Women in the region give birth to 1.24 to 1.42 children. An average of 2.1 children per woman was needed for positive population growth, investor.bg said.The advanced average age was another serious problem for the region. The current ratio between pensioners and workers is 20:100. In 2035, the ratio will be 33:100 and will grow to 50:100 in 2050.
EIU: Economic indicators in Bulgaria to weaken through 2011
Bulgaria's economic growth is expected to slow from its current annual rate of 6 per cent to 4 per cent in 2011, according to the analytical unit of The Economist magazine.The Economist Intelligence Unit (EIU) sees a deterioration in some business indicators towards the end of the review period, including labor costs and foreign direct investment, according to Dnevnik Daily.According to the EIU, the economic expansion in Bulgaria will be influenced by negative population trends.The report shows that Bulgaria's population will decrease to 7.4 million over the next five years. The number of employed will remain, at 3.2 million, nearly unchanged.The latest economic data released by the Bulgarian National Bank showed a GDP growth of 6.2 per cent for Q1, which is larger than projected.The five-year forecast reports that Bulgaria will probably meet the Maastricht criteria for eurozone membership by 2011.Minister of Finance Plamen Osharski has recently said there will be no EMU rush, and has indicated that 2012-2015 as the target.
Foreign tourists spend � 500 million in Bulgaria
"Foreign tourist spent 532 million euro for the first five months of the year. The earnings are by 16% more compared to same period in 2006," stated Anelia Krushkova, Chair of the State Agency for Tourism.The number of tourists coming from the European Union increased by 30%. From January to June, 1.922 million tourists visited Bulgaria, according to date of the National Statistical Institute and Bulgaria's Border Police. Their number is by 0.37% lower compared to the same period of 2006."For the same five months, Bulgarians spent 497 million euro on holidays abroad," Mrs Krushkova said further.
A 6.2% growth of Bulgaria's economy expected next year
The first concrete talks over Bulgaria's budget for 2008 are to start close to the fresh waters of the Bulgaria's Black Sea coast. Leaders of the ruling coalition together with ministers will hold discussions over the state's economy at a meeting to take place in the former royal residence of Evksinograd near Varna. Economic forecasts for next year envisage a considerable growth of the GDP - 6.2% - and an inflation rate decline to a 2.8%. Budget expenditures in 2008, including EU membership installment, will amount to 40,7% of GDP, which, translated into figures, would mean 22 billion levs (1euro=1.95levs). Other topics to be brought up will be the fulfillment of the state budget for 2007, as well as the feasibility for implementation of certain social policies by the end of this year. By May 2007, the budget surplus reached 1.8 billion levs. on the other hand, however, foreign trade deficit exceeded 5.2 billion levs. Bulgaria's government has promised the International Monetary Fund that if the deficit growth continues, 90% of the additionally collected revenues will be saved in order that the fiscal year be settled with a 2.3% GDP surplus.
Bulgaria, Romania to join European Economic Area
Bulgaria and Romania joined the European Economic Area in an agreement signed on July 25 in Brussels, according to an Economy Ministry statement.The EEA agreement facilitates relations between EU member states and a small group of non-EU European countries in the context of the European domestic market.The results of the negotiations mean that Bulgaria and Romania will benefit from the principle of equal treatment, according to BBC Monitoring.The treatment for Bulgarian and Romania will be in accordance with the agreement that includes the 10 member states that joined the EU in 2004.Almost 100 million euro in financial assistance will be granted by AELS/SEE countries to support steps to protect the environment, promote sustainable development, the reduction of greenhouse gas emissions, energy efficiency, and the development of human resources and health care.
USAID, Bulgarian NGO representatives sign financing deal
Representatives of the US Agency for International Development and Bulgaria's NGO Nachala Cooperative signed an agreement for receiving financing from Bulgarian and international financial institutions.The agreement will allow Nachala to receive financing for granting loans to starting businesses, owners of small businesses and unemployed people.The agreement was signed by USAID Mission Director for Bulgaria Michael Fritz and Nachala chairman Petar Arnaudov.Nachala will now be able to meet the growing needs of investment capital of the small and medium enterprises in the country.Through Nachala, which means "beginnings" in Bulgarian, borrowers can also receive loans at lower interest rates and faster than at a bank. Since it was started in 1997, the group has lent some USD 20.3 M to nearly 10,000 small businesses. About half the loans are taken out by women.
The voluntary insurance sector have the chance to manage BGN 2 billion

The private health insurance funds in Bulgaria have the chance to manage at least BGN 2 billion, though at present they manage only BGN 20 million. According to the draft national health strategy, which is being prepared by the ministry of health, all off-budget resources in the system can be managed by the private funds. Currently the budget provides BGN 2.216 billion for health, the bulk of which (BGN 1.465 billion) is spent by the National Health Insurance Fund (NHIF).Statistical data show that about BGN 1.8 billion of household budgets is spent on medicines, dental services, other regulated payments in hospitals etc. Another BGN 1 billion or so is spent as unofficial payments.
According to experts of the health ministry, all non-budget funds may be managed by the private funds, provided that they guarantee the quality of health services. That will increase confidence in the funds and attract more insured people. Voluntary insurance should be provided on a long-term basis. It should not repeat services covered by the NHIF, the strategy reads.It is not clear from the draft what will happen to voluntary insurance, the executive director of Doverie United Health Insurance Fund, Mimi Vitkova, said. The document preserves NHIF's monopoly and the statements that voluntary insurance will develop are not backed up by concrete measures, she added.
EU to license Bulgarian dairy farms, slaughterhouses once in two months

The European Union is most likely to every two months clear Bulgarian dairy farms and slaughterhouses to export to the EU, the Bulgarian Аgriculture Мinister Nihat Kabil said on July 24, 2007. Although the EU postponed the decision until September 2007, it has already reached agreement on key issues. So far the EU has allowed 52 Bulgarian companies to sell products on its territory. Five hundred slaughterhouses and dairy farms have not fulfilled the EU requirements yet. The companies which do not take any measures to meet the EU standards will be shut in end-2007. The rest will have to get EU licences by end-2009. Raw milk producers can align production to the EU standards by the end of 2009. The ministry is considering a few options to redistribute the national milk quotas. Under one of the options, the owners of cows may get subsidies if they give up milk production. Thus other producers will be allowed to buy their quotas. In February, farmers requested a transition period for EU compliance to have time to invest in milking installations and refrigerated tanks preserving the quality of the milk during transportation to dairy farms.

 

INVESTMENTS:

Ten candidates are ready to invest in a waste treatment plant

Аt least eight or ten companies are ready to invest in a waste treatment plant in Sofia, minister of environment Djevdet Chakarov said, but declined to name the potential investors. The Sofia municipality has to choose the companies it is ready to work with, he added.One of the options to finance the plant's construction is under the operative environment programme. The project may be presented to the European Commission but it is up to Brussels whether to approve or reject it, Chakarov added.
Machine components maker to invest up to 10 Mln EUR in Ruse

Local machine components manufacturer Tamares Industries Bulgaria has won the bidding for a municipal lot in the Ruse industrial zone with a bid of (EUR 882,000) USD 1.21million. The investor will invest between (EUR 2 million) USD 2.76 million and (EUR 10 million) USD 13.81 million in the project, creating 50 to 300 jobs. Tamares will be required to complete the project within 36 months of the singing of the sale contract. The Ruse municipality is selling a total of eight land properties in the industrial park.
Bulgarian-registered company Tamares Industries Bulgaria plans to invest up to 10 million euro ($13.8 million) in building a machine parts plant in the Danube city of Ruse, a deputy mayor said on Monday."We expect them to launch their initial investments within 18 months and complete the project within 36 months from signing the [land] purchase contract," Alexander Nedelchev told SeeNews. He said the investment would vary between two and 10 million euro.Tamares Industries Bulgaria officials were not immediately available to comment.The plant will employ up to 300 people, Nedelchev said. He added that the city had an unemployment rate as low as 3.6% or 3.7%, compared to the country's June rate of 7.42% and was facing a shortage of skilled workers following the announcement of large international projects in the city.The plant will be located in a planned industrial park in Ruse, which is expected to be completed by the end of 2010, Nedelchev said. He added the total investments in the park would exceed 200 million levs ($141.5 million/102.4 million euro).The largest investor in the park so far is French aluminium car parts manufacturer Montupet, which has started the construction of an up to 80 million levs plant that would sell its products to major international automobile manufacturers in Europe. Bulgaria joined the EU in January. It attracted record high foreign direct investment (FDI) of 4.1 billion euro last year, up from 3.1 billion euro in 2005.
Varna hosts renewable sources investment forum
International investment forum will start in Grand Hotel-Varna and will continue till 25 July.Тhe forum will be attended by mayors and municipality administrations of over 30 towns, among which Shumen, Yambol, Blagoevgrad, Targovishte, Stara Zagora etc.The main topic of the forum is “Innovations and renewable sources – base for economic and social growth in Bulgaria in the context of EU environment”.
Organizer of the event is “Project Association for development of economy and culture”.
The aim of the forum is to achieve concrete arrangements between financial institutions and funds on one side and Bulgarian municipalities on the other side.
Orchid Developments to invest � 100 mln in Varna mall.
Orchid Developments Group, a property developer and hotel operator in Bulgaria, will invest 100 mln euro in a shopping mall in Varna, on the Black Sea, the company said at the presentation of the project. The construction of Grand Mall, designed by MYS Architects, should begin imminently with the official launch provisionally slotted for 2009. The commercial center, which will also incorporate an office segment, will have a built-up area of over 150,000 sq m, including 45,000 sq m of lettable retail floor space. The three office towers of the center will deliver a total of 40,000 sq m. Colliers International has the exclusive agency contract for the lettable premises. A total of seven shopping malls are currently in development in Varna. Luke, the real estate investment trust incorporated by Carl-Heinz Pfohe, the German owner of Bulgarian Ford dealer Moto Pfohe, is building Pfohe Mall. That project is nearing completion. Business group TIM, local businessman Georgi Gergov, construction company Densi and Polish developer GTC are also developing shopping mall projects in Varna.Interservice Uzunovi, the Bulgarian home appliance and consumer electronics retailer, has sold its Varna mall project to Miller Developments, a UK commercial property development company. In a press release posted on its corporate website, Miller Developments said it has agreed to buy Mall Varna, with a gross leasable area of 32,000 sq m, from Interservice Uzunovi at a yield of 7.5%. Construction at the 1.7 ha site, located in the west central area of the city, began in September 2006 and completion is scheduled for March 2008. It will be anchored by a Piccadilly supermarket and a 1,300-seat, eight-screen Arena multiplex cinema, said the press release. In total there will be 150 shops, of which over 70% are pre-committed and final leases signed for 40%. The five-storey development has been designed to modern European standards and will feature three levels of shops and entertainment facilities and three levels of underground parking, with surface level parking also available.
Varna Towers to Invest BGN 85m in Bulgarian Mall

Bulgaria's Varna Towers will invest nearly BGN 85 million in the construction of a commercial, amusement and office complex in Varna, manager Martin Zgurev said. Mall Varna Towers will include a mall and two 70-meter administrative towers, which will be the tallest buildings in the coastal city. The project will be certified as a first-class investment this week.The total area of the mall will be 51,761 sq. m, which will make it one of the biggest commercial and amusement centres in Varna, together with Mall Varna, Orchid Mall, and Galeria Varna. The office part will be on 12 floors with a total area of 18,638 sq. m. A helicopter pad and a swimming pool will be built on the roofs of the two towers. The complex will also have an underground parking lot for 500 cars.The investors have secured the necessary building permits and plan to begin construction work next month. The mall is expected to be completed within two years.

EVN to invest BGN 9m in Bourgas region

Two mobile substations will be installed on the southern coast by 2008 to improve electricity supply there, the local power distribution utility, EVN, said. The installation is necessitated by the overbuilding of the resorts. The electricity distributor will invest a total of BGN 8.9 million in the region of Bourgas.In the first half of 2007 EVN invested BGN 56 million in the construction and renovation of 72 km of mid-voltage network and 960 km of low-voltage network. The company has improved debt collection to more than 90%, losses have dropped to below 15%, EVN said.

Estonian Real Estate Company Arco Vara To Invest � 24 Mln in Sofia Project

Estonian real estate company Arco Vara Group plans to invest 24 million euro ($33.2 million) in a residential and office building in Bulgaria's capital Sofia within three years, the company said on Monday.The building will have a built-up area of 35,000 square metres, Arco Vara said in a statement.Arco Vara is present in Bulgaria, which joined the European Union in January, since last year. The country's booming real estate market has attracted a large number of foreign investors aiming for high yields over the past few years. Arco Vara Group operates in Romania, Estonia, Latvia, Lithuania and Ukraine. It plans to invest a total of 400 million euro in the six countries in the following three years.

Ocif, Israel Theaters buy Ruse lot for shopping mall scheme
A joint venture of Ocif Investments and Development Ltd., controlled by Arcadi Gaydamak, and Israel Theaters Ltd. has bought a 15 acre lot in Ruse, Bulgaria for 27.5 mln euro, including VAT, reports Israeli English-language newspaper Globes. In Bulgaria, Ocif and Israel Theaters partnered up to develop the Mall of Sofia and Mall of Plovdiv schemes before selling them to Irish fund Quiland and the real estate division of GE.The companies plan to develop the Ruse lot into a shopping mall with 25,000-35,000 sq m of space. Ocif and Israel Theaters each own 45% in the Bulgarian company that will implement the project.The local office of the Israeli companies said their local partner is the Iris company.
Tchugunoleene to invest some � 4 mln

Until a few months ago Tchugunoleene of Ihtiman was only one of the companies listed on the Bulgarian Stock Exchange: it was no attraction for market players. That, however, has changed. The company posted a BGN 484,000 net profit for the first half of 2007, compared with a BGN 1.537 million loss for the year-ago period, non-consolidated report data show.The turnaround in the foundry's performance was mainly due to the jump in net product sales by more than BGN 4 million. The sales revenue of the company amounted to BGN 17.179 million at the end of June 2007, compared with BGN 13.072 million a year earlier. Expenses, however, also rose: from BGN 7.817 million to BGN 12.586 million.The company's issued capital amounted to BGN 641,000 at the end of June, unchanged from last year. Tchugunoleene has 640,599 shares listed on the stock exchange with a par value of BGN 1 each. The main shareholders in the company are Tchugunoleene 97 with 83% and a group of natural persons with 16%, according to Daxy. For the past six months the company's stock has appreciated by more than 600%. The price of the shares reached BGN 23.39 apiece on Monday, July 23.In metal casting, it is essential to follow the modern trends, the executive director of Tchugunoleene, Vladimir Popov, told the Pari daily. We are now embarking on a big investment programme for about EUR 1 million, which will improve the environment, reduce pollution and enhance the quality of our products, Popov added. New equipment will be installed for some EUR 1.5-2.0 million to meet the energy efficiency requirements. The company will also buy a unique machine for some EUR 1 million, Vladimir Popov said.
Equest Balkan Properties plans further investment in Bulgaria and Romania
Investment fund Equest Balkan Properties plans to raise more funds for further investment in Bulgaria and Romania, as well as to carry out the fund’s current projects in the countries, Equest representative for Romania George Teleman said.London based Equest Balkan Properties wanted to raise �50 million ($69 million) for investments in Romania. As Bulgaria is the fund’s priority, the sum to be invested in the country would be even larger, Teleman said. The money will be invested mainly in business developments, including offices, commercial parks, logistic centers and parking places, but not in residential property. Investor.bg was not able to get comment from the Equest office in Bulgaria. Equest owns the City Center Sofia mall, electrical appliances hypermarket chain Technomarket, as well as numerous properties in Bulgaria.
Equest fund Equest Investments Balkans recently acquired 33.5% of Rila Samokov 2004, the company that is to carry out the Super Borovets project. Equest Balkan Properties plc has been formed to invest in the South East Europe property market with a principal focus on Bulgaria and Romania, and secondarily in the rest of the Target Region. EBP is listed on the London Stock Exchange.
Italian-led JV to build � 80 mln  yacht marina in Ahtopol
The Bulgarian city of Ahtopol, on the Black Sea, has a set up a joint venture with several Italian companies for the construction of a yacht marina.The Yachtopolis joint venture has already handed the municipal council in Tsarevo, which has jurisdiction over Ahtopol, a letter of intent concerning the project, said Georgi Martinov, one of the company's executive directors.The Ahtopol municipal administration is ready with the design concept for the marina which will dock 500 yachts and 100 fishing boats.Yachtopolis was registered a year ago. It is 80%-owned by the Italian shareholders.The Ahtopol marina project will be showcased at this year's Genoa International Boat Show.
Fitch Affirms Bulgaria's Credit Rating at "BBB"

Fitch Ratings affirmed on Thursday its long-term foreign currency credit rating for Bulgaria at investment grade "BBB", with a stable outlook."Fitch remains concerned at the size of Bulgaria's current account deficit, although the predominant role of longer-term capital in financing it is reassuring," said analyst Andrew Colquhoun.At the same time, the economic growth figures and strong public finances continue to support the rating, he added.Booming imports drove the current account deficit to 16,2% in 2006, from 12,2% a year earlier, but investment growth, at 9% of gross domestic product (GDP), compensated for around 60% of the outflows.Fitch said it shared the authorities' concern at the pace of credit growth, which rose by 49% in the corporate segment and 40% in the retail segment year-on-year at end-May, and is exacerbating macroeconomic imbalances and increasing exposures to potential shocks. However, the fact that the banking system is almost 80% owned by foreign parents limits the risk the government would have to step in to provide support for the system in case of a crisis.Strong economic growth, to the tune of 6,1% last year, further supported Bulgaria's credit rating, which measures the likelihood of the country failing to pay its debts. Bulgaria's "BBB" rating qualifies its debt instruments as a safe investment.

Engel, Heitman to invest  � 30 million in boutique apartments in Sofia

Israel's Engel East Europe and US fund Heitman are launching their first joint residential project in Sofia's Vitosha district. The Boutique Apartments includes 54 luxury apartments, Engel's executive director for Bulgaria, Liron Or, said.
The complex will be ready by the spring of 2008. The prices range between EUR 1,000 per sq. m and some EUR 1,200 per sq. m. Buyers are expected to be mainly Bulgarians with above-average incomes.Engel and Heitman's next joint project will be located in Gorna Banya, where the companies have bought a 2-ha plot. They will build a gated residential development with 500 apartments. The investment will amount to some EUR 30 million.

SEEF II to invest USD 320 mln in the region

The Southeast Europe Equity Fund II (SEEF II) has raised USD 320 mln for investments in the region, the US company Bedminster Capital Management LLC, which is a sponsor and investment manager of the fund, announced. The target size of the fund was set at USD 200mn, up to 25% of which is committed by the EBRD. The co-financing comes from more than 20 investors from Europe and North America . SEEF II is the successor of SEEF I launched 7 years ago and will finance private sector projects in Turkey , Bulgaria , Romania , Albania and former Yugoslavia . The fund has already completed 4 projects in the media, healthcare, cable TV and financial services sectors. SEEF I completed successfully its investment programme, ensuring more than five times return on investment. SEEF II has financed through its subsidiary New Europe Directories Bulgaria the creation of the business guide in the country Golden Pages.

 

 

COMPANIES:

Greece's Aikon buys plot in Super Borovets
The Bulgarian municipality of Samokov has sold a 16.6-ha plot to Greece's Aikon for the record amount of BGN 37.430 million (EUR 115 per sq. m). The Greek company is a subsidiary of investment group GEK, which has carried out 60% of the construction works for the Olympic Games in Athens, the reconstruction of the Sofia-Svilengrad railway line, and several residential complexes in Sofia. GEK is also interested in buying land near the Danube Bridge 2. The plot in Samokov is included in the scope of the Super Borovets project.The Greek investor plans to build a big holiday complex with hotels, apartment buildings, commercial and spa centre, amusement and service facilities. The investment will amount to some EUR 100 million.
Greek Wholesaler Elgeka To Distribute U.S. Kimberly-Clark's Products in Bulgaria

Greek wholesale and distribution company Elgeka said on Wednesday its Bulgarian unit had signed a three year agreement with U.S. consumer goods company Kimberly-Clark on the distribution of its products in Bulgaria.The agreement, which will come into force on August 1, is on the distribution of the Kleenex tissues, Huggies diapers, Kotex pads and tampons, and Bobi Absorba adult diapers, Elgeka said in a statement. This is expected to boost Elgeka Ferfelis Bulgaria's turnover by 1.0 million euro ($1.37 million) annually, the statement said. Elgeka Ferfelis Bulgaria, which launched operations a year ago, is currently distributor of British household goods giant Reckitt-Benckiser, German hard candies maker Kalfany, Dutch candy toys producer BIP and others. The company said last year it expected a turnover of up to 3.5 million euro in 2006 and a several times higher turnover in 2007. Elgeka Ferfelis Bulgaria supplies all international retail chains active in Bulgaria as well as around 3,000 smaller stores.Elgeka also said its Romanian unit signed a provisional agreement with U.S. Schick-Wilkinson Sword, the world's second biggest razor maker after Procter&Gamble's Gillette, on the distribution of its products in Romania over the next three years, Elgeka said in the same statement.The agreement will push up Elgeka Ferfelis Romania's turnover by 2.0 million euro annually.Romania also joined the European Union in January.
Besa Valley boasts a collections of choice wines
Every year, 1350 hectares of vineyards provide grapes for elite wines enjoyed by the connoisseurs all over the world. The Besa Valley winery (named after the Thracian tribe Besi, believed to have produced excellent wines) owes its great success to the selected grape varieties and the modern technology used in their wine production. The company has been one of the leaders in the branch since 2001.The high quality products of the modern wine cellar, situated near Pazardjik, have won series of prestigious awards. Every year, the winery plants 40 ha of vineyards.The company produces choice wines, such as Cabernet Sauvignon, Merlot, Sira, etc. They make Emira - a wine famous all over the world for its exclusive flavour and taste. In 2005, this brand of wine won the grand prix at Vinariya expo; it ranked 30th in the chart of the best wines published by The Financial Times. Robert Parker, one of the most famous professional wine tasters, has described it as one of the excellent wines on the world market.
Overgas Capital offers credit to bourse investors

Investors in the Bulgarian capital market now have one more option to obtain additional financial resource. They can borrow funds from Overgas Capital by providing as security stocks included in the BG40 index of the most traded stocks, shares in investment companies, and units in Karoll's mutual funds.The new product has been offered to investors since July 19, 2007 and we already have more than 15 clients, the executive director of Overgas Capital, Ilian Iliev, told the Pari daily. For the time being the option is available only to Karoll's clients but we are in negotiations with other investment intermediaries as well, he added.Promotional interest of 10% is offered until October, when the rate will be raised to 10.50%. The interest for financing secured with BG40 stocks is set at 12%. The size of a loan cannot exceed 70% of the market value of the security, the maximum amount is set at BGN 80,000. The interest on credits is repaid on a monthly basis, the principal is returned at the end of the period, which can range from two to 36 months.

Bulgargaz, OMV in Black Sea shelf drilling agreement
Bulgarian state-run Bulgargaz Holding and Austrian oil and gas corporation OMV have signed a memorandum to conduct joint Black Sea shelf drilling and co-operate for the expansion of the local gas market.The experts of the two companies are drafting an agreement specifying the projects that will be implemented jointly.The participation of the Bulgarian company in the OMV gas licences will also require financing, an issue that will be further discussed by the two partners.The OMV partnership is part of the strategy for Bulgargaz's development through 2009, said executive director Lyubomir Denchev. Bulgargaz is considering a joint venture with OMV or even joining under a management contract the Austrian company's Avanti chain of service stations which will sell, diesel fuel, gasoline A-95, propane-butane and methane, said Denchev. That would allow the holding company to set foot on the local methane market.Bulgargaz plans to build methane filling stations or a virtual pipeline system, supplying methane from compressor stations to clients within a 80 km radius.Bulgargaz is also in partnership talks with Melrose Resources Ltd. Which is licensed to drill for gas and oil in five Black Sea shelf blocks. Melrose's ongoing gas development is in the Galata concession area which should be depleted in 2008. The gas output is sold to Bulgargaz.The holding company plans to repurpose the depleted deposit into a gas repository.Bulgargaz is reviewing its long-term co-operation deals with Germany's Ruhrgas and Gaz de France. The review should be completed by the end of July. The agreements are expected to be updated with the inclusion of commitments for the implementation of concrete projects. At the moment, the partnership under the agreements is limited only to staff training initiatives, said Denchev.
French Dalkia in talks to acquire four heating utilities in Bulgaria

French company Dalkia International is in talks to acquire the heating utility companies in the Bulgarian cities of Burgas, Pleven, Sliven and Vratsa.All the four heating utilities are owned by companies, indirectly controlled by businessman Hristo Kovachki, business daily Dnevnik said.Dalkia International declined comment on the issue.Dalkia bought earlier this year the heating utility in the Bulgarian city of Varna at a price of 6.78 million euro ($9.35 million). The company has said it was also interested in the country's largest heating utility, in the capital Sofia, which has not been put for sale yet.Bulgaria has sold the heating utility companies in most of its big cities in an attempt to further liberalise its energy market after joining the European Union on January 1.

Serbian company Delta poised to buy Bulgarian supermarket chain Piccadilly
Bulgarian food store operator Piccadilly has signed a preliminary contract for the sale of a majority stake to Serbian peer Delta, the operator of the Maxi supermarket chain.The deal was confirmed for Dnevnik by Piccadilly representatives who declined further details before the transaction is finalised.Under the terms of the deal, Delta will buy Piccadilly's supermarket business while the Bulgarian company will retain ownership of the real estate assets.A deal with a strategic investor would aim to attract fresh capital for the development of the chain, the Piccadilly management said recently.Piccadilly, a mid-market player, operates stores in Varna, Burgas, Veliko Tarnovo and Sofia and plans to set foot in Plovdiv in 2008.The store chain, co-owned by local company Boliari and EBRD, did not intend to shop itself to potential buyers before the second stage of its planned development wraps in late 2008.But the intense interest of foreign investors prompted the company to retrofit its strategy.
Devin offers 3m shares Wednesday
Bulgaria's Devin AD will offer 3 million new shares under a book-building method on Wednesday, July 25. Thus the bottling company will raise its capital from BGN 14.891 million to BGN 17.891 millionThe shares will have a par value of BGN 1, their issue value will range between BGN 5 and BGN 7. Depending on the oversubscription results, Devin plans to offer an additional amount of 450,000 existing shares. The approved bids will be clear on Thursday, the payment of shares will start on Friday. The issue is lead-managed by ElanaThe company will use the raised funds for boosting its market share in Bulgaria (31% at the end of 2006) and expansion abroad. Devin is part of Soravia Group.

Austrian company to acquire Sofia Mel

Bulgaria's Commission for Protection of Competition has allowed Austria's Leipnik Lundenburger Invest to acquire the controlling package of shares in one of the biggest flour mills in the Balkans, Sofia Mel. According to the anti-trust body, the deal will not raise the market share of Sofia Mel, as it is well below the dominant position threshold and Leipnik Lundenburger Invest has no operations on the Bulgarian market.
The acquisition is part of the Austrian company's market expansion. Leipnik already manages flour mills in Austria, Germany, Hungary, Poland and Hungary.
U.S. American Standard sells Bulgarian units to Bain Capital partners

The U.S. American Standard has sold its two Bulgarian units, bathroom fixtures manufacturer Ideal Standard Bulgaria and bathroom fittings maker Ideal Standard Vidima, to global private investment firm Bain Capital Partners as part of its plans to exit its bath and kitchen business, the company said.American Standard had signed a definitive agreement to sell the company's worldwide bath and kitchen products business to funds advised by global private investment firm Bain Capital Partners for $1.755 billion (1.27 billion euro) in cash, the company said in a statement late on Monday."Upon completion of the sale, Bain Capital will acquire all of American Standard's bath and kitchen business with 2006 annual sales of $2.4 billion, 26,000 employees and 54 production facilities in 23 countries worldwide," it added.The sale is due to be closed in the fourth quarter of the year and the proceeds from it are intended to be use primarily to repurchase common stock and reduce debt.Earlier this year, American Standard which manufactures air conditioning systems, bath and kitchen products, and vehicle control systems, said it was planning to separate its three businesses by selling bath and kitchen operations, spinning off vehicle control systems business and retaining its largest businees - air conditioning systems and services. The company will spin off its vehicle control systems operations in a separate company on July 31.

Cypriot company to buy soft drink maker Agrima

Bulgaria's Commission for Protection of Competition has allowed Quadrant European Beverages Limited of Cyprus to buy 99% of Agrima's capital. The company manufactures different soft drinks, including Pepsi, Mirinda, Aqua Diva, Prisun. Agrima is also the official distributor of energy drinks Red Bull and Guarana.Quadrant plans investments in the Bulgarian company that will enhance efficiency and offer richer variety to consumers, the watchdog said. The Cypriot company has no operations in Bulgaria at present, so the deal will not give the parties a dominant market position.
On the contrary, the concentration will have a positive effect and strengthen competition.

Eurohold to raise 220 mln euro for acquisitions
Local holding company Eurohold Bulgaria could issue bonds worth up to 220 mln euro over the next five years.A September 24 general meeting of shareholders will vote on a proposal to authorize the management to issue debt of up to 200 mln euro over the next five years as well as to make a private placement of up to 20 mln euro open to a designated circle of investors.It is no secret that Eurohold is in talks to expand abroad and acquire insurance assets and hence the bond placement provides an option to promptly raise the necessary capital, said Eurohold executive Asen Hristov.The 20 mln euro debt will most likely be issued by the end of 2007, said Hristov. According to the shareholder meeting notice, the bond will have a five-year maturity. The placement process will be open to no more than 100 buyers.The shares from the recent Eurohold Bulgaria capital raise started trading on the local bourse on Wednesday. They closed 0.76% down at 5.19 levs.
Odessos reports BGN 1m higher profit for H1

The profit of Bulgaria's Odessos shiprepair yard for the first half of 2007 increased by BGN 1 million, year on year, to BGN 3.9 million, the company's report shows. The revenue from services went up by BGN 3.4 million. The total revenue, however, edged down by BGN 300,000 due to smaller receipts from sale of assets. Odessos's profit for the first six months of 2006 was mainly due to the sale of BGN 3.32 million worth of assets.The report also shows that the company's expenses declined in the first half of the year to BGN 14.18 million. only the expenses on wages and salaries rose to BGN 4.85 million. The negative exchange-rate differences dropped to BGN 139,000, compared with BGN 1.75 million for the first half of 2006.

 

Bulgaria government grants BGN 2 mln to Hewlett Packard center

The Bulgarian government last week decided to grant 1.9 mln levs for the training of IT staffers that will man the a Hewlett Packard Co. contact center in Sofia. The allocation will be shared among the employees of all three companies that will occupy the Global Delivery Bulgaria Center: HP, Ajilon Consulting Bulgaria and Sitel Bulgaria. This is the second government ordinance issued in support of the project. The 2.444 mln levs allocated under a 2006 ordinance were not utilised due to technical glitches.

Former Bulgartabac company does well after going private
The privatisation of Bulgartabac unit J.G. BT was a definite boon for the company's bottomline as indicated by its H1 earnings figures.The Plovdiv-based company, comprising a printing and filter-making unit and a manufacturing unit for cigarette-making equipment, was acquired in October 2006 by a Cyprus-registered offshore outfit. According to the financial report, J.G. BT swung to a net profit of 2.83 mln levs in H1 2007 versus a loss of 156,000 levs a year ago. Sales rose 16% to 3.04 mln levs. In early 2007, J.G. BT said it had budgeted 7.8 mln levs for pre-printing systems and offset printing equipment. In addition to cigarette packaging, the company also manufactures multi-colored labels and paper and cardboard packaging for the food, cosmetics and pharmaceutical industries.
German`s Liebherr expands plant in Bulgaria
Liebherr, the German manufacturer of refrigerators and freezers, plans to expand its plant in the southern Bulgarian village of Radinovo, the government press office said on July 26.The company said it plans to spend 83 million euro on the project.The cabinet approved budget allocation of 1.77 million leva for the construction of a 2.2km road that will connect the Radinovo industrial zone with the Trakiya motorway. The road facility will also service other manufacturers in the surrounding area, such as Socotab, Bella Bulgaria, Industrial Commerce and Schneider Electric.The project will create 600 new jobs, bringing the overall workforce to about 1 600.