Bulgaria is to pool its main energy assets into a single company in an attempt to increase their competitiveness on the international markets.
The five companies – which include its main gas and electricity utilities – will be merged into a Bulgarian Energy Holding Company (BEHC) by the end of 2008. With assets worth EUR4 billion, it will be one of the largest energy companies in the region.
The government believes that the move will increase the competitiveness of the five companies – Maritza East Mines, Maritza East 2 Thermal Power Plant, Kozloduy Nuclear Power Plant, National Electric Company and Bulgargaz – and enhance the quality of energy services in the country. The annual operating income of BEHC will be around EUR1.8 billion.
The Bulgarian Energy Holding Company will be 100 per cent owned by the state, but the key aim is to transfer the management functions from the Economy and Energy Ministry to BEHC and prepare it for a listing on the local and international stock exchanges.
The Bulgarian government says that consolidation into a single company will give BEHC a good position in Europe’s energy markets, where competition has led to the emergence of vertically integrated, dynamic energy corporations. Non-integrated energy companies are not successful in a liberalized environment, says the government.
BEHC will benefit from optimized expenditure and management and will be more attractive to investors, according to the government. The new entity aims to group together economically stable, flexible businesses with an adequate market conduct, functioning under a single financial strategic management.
The Economy and Energy Ministry will keep stakes ranging between 51 and 75 per cent in the five energy companies, while the minority shares (between 25 and 49 per cent) will be transferred to the parent company. The Ministry will hold a controlling interest to cushion the subsidiaries from any risks during the transition period.
