Bulgarian state-run coalminer Maritsa East plunged deeper in the pits, posting a BGN 22.5 million loss for January to August, a significant deterioration on its six-month negative result of BGN 17.5 million, showed the financial statement of the Bulgarian Energy Holding (BEH). Instead of giving the company a breath of fresh air amid the suffocating economic environment, the miner’s cost-cutting efforts are doing it no good as only for a month its loss widened by BGN 2 million. At the same time, the holding company, which was incorporated last year to lump together key energy assets, is gliding smoothly in troubled waters, raising its eight-month profit by 34% to BGN 309 million. The mega structure groups Maritsa East coal mines, Maritsa East power station, Kozloduy nuke, power grid operator NEK, gas companies Bulgargaz and Bulgartransgaz, and telco Bulgartel. The group’s revenue gained 11% month-on-month in August owing to its cost-containment steps that narrowed expenses by 9.8%. Yet year-on-year, BEH’s expenditure grew faster than earnings, at 1.6% and 0.2%, respectively. Of BEH’s subsidiaries, the national electric company narrowed its loss by BGN 14.6 million to BGN 18.4 million at the end of August. The improvement was attributed to the lower investment and repair costs and a 4.5% power price hike effective from July 1. The company has scaled down its full-year investments by BGN 15 million. It blamed its previous losses to the higher price it paid to heating firms to buy out their co-generated electricity and the hefty spending on the Belene nuclear project and the Tsankov Kamak hydropower scheme. Bulgartel slimmed down its loss to BGN 990,000 but Bulgargaz was the standout, swinging to an eight-month profit of BGN 61.6 million from a loss of BGN 90 million for the same period of 2008.

(Dnevnik)

The Council of Ministers will have a final say on major sell-off deals worth over BGN 10 million, assuming the functions of the supervisory boards of the privatisation and post-privatisation control agencies. The amendments charted by the economy and sponsored by the finance ministry will save around BGN 400,000 in annual payroll expenses of the two supervisory bodies that will be closed. Under the proposal, which will be reviewed at the cabinet's next sitting, the sell-off agency and the post-privatisation control agency will be managed by a three-member executive board comprising one director and two deputies. Under the current structure, the supervisory boards of the privatisation and post-privatisation control have seven and five members, respectively, each having a monthly paycheck of BGN 2,800. In mid-September the two agencies submitted their reports to the parliamentary economic committee prompting debates for a change in their functions and the statutory framework. The privatisation agency proposed lifting the sell-off ban on some state enterprises while the post-privatisation control agency pressed for barring companies which have defaulted on their sell-off commitments from participation in public procurements.

(Dnevnik)

Bulgarian real estate fund FairPlay Properties on Wednesday sold a plot to Lidl Bulgaria, the local arm of German hard discounter Lidl, part of Schwarzgruppe.

The transaction has a price tag of EUR 2.3 million before value-added tax. The 22,000 sq m plot in the second largest city of Plovdiv that will accommodate a Lidl supermarket is part of the chain's local expansion efforts. The retailer is actively growing its Bulgarian network having commenced construction of a couple of outlets and putting the finishing touches to others located in Lovech, Pazadjik, Silistra and Pleven. The plot is located in FairPlay's latest development, Retail Park Trakia due to sprout in the eponymous residential quarter. At a later stage, the park will house a hypermarket of a renowned European non-food chain FairPlay did not name. Sources told Dnevnik the property fund is in talks with several big retailers but pen is not put to paper yet. FairPlay will use the sales proceeds to reduce its credit exposure, said its executive director Manyu Moravenov. Including the above sum, the fund has repaid EUR 5.4 million in principals since the start of the year.

(Dnevnik)

The Bulgarian cabinet is considering taking a EUR 1 billion loan from the World Bank under the Government Priorities funding pot, regional development and public works minister, Rosen Plevneliev, told the parliamentary committee. The new credit will add to the EUR 1 billion the country is seeking from the European Investment Bank (EIB). The money will back schemes that are high on the cabinet’s to-do list such as wastewater treatment plants and infrastructure projects, Plevneliev said without elaborating further. Talks with the World Bank are likely to start by the end of the year. At the same time, the EIB was ready to extend the first tranche of the EUR 1 billion loan that will be used to co-fund European projects, with the technical details yet to be specified, the minister added.

(Dnevnik)

Vivacom, the new brand of telecoms company BTC and its mobile unit Vivatel, will bundle cable Internet and mobile and fixed telephony into Trio service, a package of BGN 40 a month at a download speed of 1.5 MBps. The company will roll out a Duo package as well combining call minutes to fixed and mobile networks. The third service, Home, will offer Internet access and fixed telephony. “This is a means to attain economies of scale,” said Krasen Yotov, analyst at local think-tank Industry Watch. “Big telecoms will gradually invade the recently fragmented Internet services market where they will compete with both national and regional Internet Service Providers. The launch of integrated services is a natural development in the context of the global financial crisis and the curtailing of consumer costs, including communications expenses," he added. The telco will add a TV service at a later stage. "We can't give an exact timeframe as IPTV is in a very early phase of development with a very small portion of existing networks ready to use the IPTV," a Vivacom source told Dnevnik. The company will launch the service as soon as it finds the best solution, the source added. Meanwhile, cellular carrier Globul is stepping up presence on the fixed telephony segment where Vivacom is an indisputable leader with around 95% slice. Globul's Home service offers fixed network calls for BGN 0.01 a minute.

(Dnevnik)

The Bulgarian Stock Exchange (BSE) seems to be running out of fuel after Thursday session repeated the poor performance of the previous day, bringing all indexes down but BGREIT of the property funds. Leading stocks dipped less than a percentage amid the lull of the past week or so. The blue-chip SOFIX closed higher in only three out of eight sessions reflecting the need of new, positive signals for the global economy. After Thursday trading, the benchmark index retreated to its lowest level since September 9. Foundry company Tchugunoleene led the winners vaulting 23.63% to BGN 4.5 in scanty volume of 50 stocks. Bulgarian Holding Company, a former privatisation fund, gained 11.06% to BGN 2.2 as hardboard producer Fazerles picked up 3.42% to BGN 43.49 exchanging 3,520 shares.

At the other side of the scales, Bulgarian River Shipping wiped off 7.92% while Doverie United Holding ended 5.91% lower at BGN 3.95 as tourist company Albena slipped 4.02% to BGN 38.87. The investment wick is lit and most institutional investors will try to pour their free resources at lower levels as the European mutual funds did, said market watcher Alexander Peev. The summer season brought hefty gains with the market bouncing over 30% inside a month erasing some of the losses incurred a year and a half ago when major indexes collapsed by 80% after foreign and institutional investors' capitals fled the market.

(Dnevnik)

Forty lenders have been entered into the central bank's registry of financial institutions as at September 30, 2009. The list is available on the website of the Bulgarian National Bank (BNB). The bulk of lenders are based in Sofia. Companies which have been denied entry into the registry are banned from extending credits and those which do so despite the ban face fines of BGN 20,000-70,000 at first offence and BGN 50,000-100,000 at second. Over 100 firms applied for registration by the September 30 deadline. To register, they need to meet a set of requirements including a bottom paid-in capital of BGN 250,000 for leasing, lending and factoring players. Also, their operational management and stockholders should comply with qualification, experience and reputation criteria. Physical and legal entities related to the respective financial institution should declare with the central bank the origin of funds they used to buy into the companies. The BNB is checking the balance sheets and income statements for the past two years of the companies' operations. Pawn shops and financial houses are not subject to registration under BNB Ordinance 26 for financial institutions. Non-banking companies that have registered with the BNB will gain access to the central credit register and will be obliged to enter data for their borrowers. Thus they can view the financial obligations of households and corporates as well as their five-year credit history.

(Dnevnik)

Cigarettes will be levied an excise duty of EUR 76 per 1,000 pieces in 2010, finance minister Simeon Djankov said in a phone conversation from Goteborg where he attended the meeting of EU's finance and economy ministers. The current rate is EUR 52 per 1,000 units and the excise hike will bring the prices of most popular brands to BGN 4.50-4.90 a pack. The finance ministry has set a marginal increase in fuel excise with a cash effect of BGN 10 million a year. The excise on diesel which impacts the end-consumer prices most will stay at its current level as the excise on petrol will rise slightly, Djankov said. The higher excise on cigarettes will boost budget revenues by BGN 226 million and the extra money will be spent on health care. The minister admitted the higher excise will encourage smuggling but assured the cabinet's efforts to overhaul the customs agency will help offset the negative effects. The excise hike plans drew serious opposition from British American Tobacco (BAT). The company, which produces Kent, Pall Mall and Viceroy, warned the measure would boost illegal trade by 40%, claiming cigarette prices in Bulgaria are the highest as measured against per capita income. (Dnevnik)