Things at Bulgaria’s beaten-down steel maker Kremikovtzi are worsening by the day as the plant has suspended production and is only kept in workload mode in the face of dwindling raw materials, an unnamed operating manager said.

„The severe money shortgage has squeezed all supplies to the lowest possible levels,” the official said.

Other high-ranking sources say Vorskla Steel has banked out of its tolling agreement with the plant due to liquidity problems of its owner, Ukrainian tycoon Konstantin Zhevago, stoking bondholders’ fears that the partnership was risky for the mill.

Angelo Moskov, the manager of the steel maker’s biggest bondholder, investment fund QVT, warned in July the tolling contract absolved Vorskla Steel from any responsibility and allowed it to walk away unscathed.

Meanwhile, economy minister Petar Dimitrov reiterated before the Bulgarian National Radio he had invited Arcelor Mittal back to the contract. Two domestic and one foreign companies may alternatively operate the plant, the minister said.

Approached for comment, Arcelor Mittal said the government had not moved an inch from its position but pledged to return if it gets the needed support.

Deputy environmental minister Chavdar Georgiev vowed Kremikovtzi will not suffer from failing to obtain an integrated pollution prevention and control permit, which would have qualified it to operate in the EU.

Georgiev said the licencing procedure may be resumed if the mill’s creditors agree not to shut down the plant and go ahead with the investment plan.

The delay will trigger no new sanction for Kremikovtzi, which has not picked up its tab of BGN 107,799 in pollution fines a month.

(Dnevnik)

The Bulgarian government and companies will meet for the first time since the global turmoil exploded to outline and seek ways to address possible negative implications.

The conference The financial crisis: Bulgaria in the Global Economy will be held on October 28 by the Confederation of Employers and Industrialists in Bulgaria and Capital weekly.

The forum will face Prime Minister Sergei Stanishev and deputy prime minister and interior minister Ivailo Kalfin with World Bank vice-president Kristalina Georgieva, Warren Coats, head of the IMF’s technical mission in Bulgaria during the introduction of the currency board, Fabio Ganzer, Shell international department head, and Ivo Prokopiev, CEIB chairman and publisher of Capital and Dnevnik, to name but a few.

The conference will seek to explore the duration of the crisis, the impact of costly money on businesses, the challenges before the energy sector, the world’s new economic heavyweights and the relations between the EU and Russia.

(Dnevnik)

Shopping malls are booming in Central and Eastern Europe, where projects worth a combined EUR 3 billion will open doors by the end of 2008 and a further EUR 6 billion next year, showed an analysis of marketing researcher PMR Research.

Bulgaria is tipped for the second fastest growth in the region with its shopping mall market seen bouncing over 600% to EUR 760 million next year.

Malls in Slovenia will top EUR 99 million only to zoom tenfold to EUR 882 million in 2009.

Bulgaria's rentable shopping space will surge 350% from 2007 to 2009, and Slovenia will see an 800% boost.

The report is silent on the financial turmoil’s toll on the segment but experts have warned the credit squeeze may kill some of the planned mall projects.

Almost half of the CEE's shopping mall space lies in Poland with Bulgaria holding a humble 2 percent of the total but breething in its neck, experts say.

(Dnevnik)

The prices of Bulgarian properties have increased by 3% on average to BGN 1,418 in third-quarter 2008 compared to the same period of 2007, showed data of the National Statistical Institute.

Flats sell for more than BGN 1,000 per square metre in half of the country’s 28 regional cities.

Brokers say the market is settling and switching to stand-by mode as some sellers have withdrawn hoping for better times while others are chopping off prices with loan installments digging deeper in their pockets.

Property prices in Bulgaria’s second largest city of Plovdiv have seen the biggest rise growing 11% followed by Dobrich with some 9%.

The increase hovers around 5% in the other regional cities.

Prices took the opposite direction in nine of the major areas with Shumen posting an 8% drop. Home prices in Varna, Bulgaria’s biggest Black Sea city, registered their first fall, be it a tiny BGN 8 per square metre.

Sofia retained the lead as Bulgaria’s most expensive city offering BGN 2,470 per square metre, a 6.8% rise. The runner-up was Varna with BGN 2,129 per square metre.

(Dnevnik)

Corporate lending in Bulgaria continued to dwindle in September coming in at BGN 494 million against BGN 1.296 billion in June, BGN 858 million in July and BGN 689 million in August, showed data of the central bank.

Pressed by closer bank scrutiny, new consumer and housing mortgage loans shrank to BGN 444 million, bouncing back to June and July levels from the weaker BGN 278 million in August.

Bankers commented the tighter loan requirements will sift through riskier projects as the crisis is having investors revise plans.

The higher price and lenders’ weakening chances to get foreign funding dried up the Bulgarian interbank market and pushed the LEONIA (LEv OverNight Index Average) Reference Rate to over 6%.

In a rush to throw liquidity onto the market, the Bulgarian National Bank said it would consider reserves 50% of the cash lenders’ hold in their vaults and lend them at a market rate 1% of the minimum reserves.

A day after the changes adopted retroactively on October 1 LEONIA eased to 5.78%.

Loans to firms, household and financial corporations topped BGN 47.8 billion in end-September speaking for 71.9 of GDP. The growth pace slowed to 47.8% from 49.5% in August.

Corporate lending calmed down to 50.2% from 53.6% in the previous month.

Household loans added 43.8% compared to 42.5% in August and reached BGN 17.582 billion.

(Dnevnik)

Bulgarian MPs have considered three bills of lifting the floor of guaranteed deposits to the local-currency equivalent of EUR 50,000 from BGN 40,000 at present, BTA state news agency reported.

Rumen Ovcharov, Milen Velchev and Yordan Tsonev of the ruling coalition proposed raising deposit protection to BGN 100,000.

Maria Kapon called for an increase to the local-currency equivalent of EUR 50,000 mirroring the EU finance ministers’ decision.

The project of Mincho Hristov and Stela Bankova got the thumbs-down of the budget and finance commission.

Also on the table is guaranteeing debt instruments issued by Bulgarian banks and allowing the deposit insurance fund to borrow from the state budget if short of cash.

The ruling parties’ proposal for state guarantees on interbank loans for a one-year period was met with a frown by the opposition.

(Dnevnik)

Bulgarian stock indices dashed investors’ brief hopes for a brighter session sinking back to record lows at the backdrop of a few flecks of green.

Dnevnik 20 of the biggest and most liquid companies closed 2.63% lower at 80.42 points, and SOFIX of the blue chips plunged under 600 points, off 1.07%.

Drug maker Sopharma offset steeper declines in both indices ending the session 9.5% higher at BGN 2.37.

Industrial conglomerate Chimimport, power tools maker Sparky Eltos, paints and varnish maker Orgachim and First Investment Bank were all down over 4%

Elana Agricultural Land Opportunity Fund weighted heaviest on SOFIX crumbling 6.55 to BGN 1.08.

Property fund gyrations dragged BGREIT 6.9% to a new historic bottom of 57.19 points. Advance Terrafund crushed some 18% with only Agro Finance surging 35% in sluggish turnover.

The property crisis bit harder at Bulgaria’s listed special purpose vehicles adding souring earnings reports to waning investors’ interest.

The broader index BG40 and BGTR30 of the companies with the highest market capitalisation and liquidity slipped to 159.13 and 410.8 points, respectively.

(Dnevnik)