JANUARY
On the line
The year started with GSM operator MobilTel releasing the names of a group of Austrian investors which it said wanted to buy out the company. A new company, MobilTel Holding GmbH, with headquarters in Vienna, Austria, was incorporated for the acquisition of MobilTel. The sale of MobilTel to an Austrian consortium was later concluded.
EBRD strategy
The European Bank for Reconstruction and Development (EBRD) announced its strategy for Bulgaria for the next three years. The bank planned to invest up to 500 million euro in Bulgaria over the period.
HBO moves in
The US movie channel HBO (Home Box Office) said it would launch a channel in Bulgaria at the beginning of April. Home Box Office, a division of Time Warner Entertainment Company, provides premium TV services to subscribers all over the world via cable.
FEBRUARY
Club hit
Vuzrazhdane business club was established, prompting a group of Bulgarians based abroad and in the country to send an open letter to the Government saying they feared special interests could take control of key state institutions. Participants in the Bulgarian Easter, members of New BGeneration and the Bulgarian Wall Street Club of New York voiced their stand in reaction to the proposed establishment of a Council on Economic Growth , to be set up with the Government, that would include Bulgarian big business representatives.
Pulling out
AremisSoft Bulgaria suspended performing its contractual obligations to the National Health Insurance Fund (NHIF) on the development of Phase One and Two of the NHIF Information System. AremisSoft said they were not paid in time. Later in the month, the company closed its Bulgarian operations.
Underground movement
Two new underground stations would link Sofia's southern part with the central and northern districts after work was completed in 2006, it was announced. Construction should begin next year, after Sofia's Mayor Stefan Sofianski signed with Japan Bank for International Co-operation (JBIC), an agreement guaranteeing a $104 million loan for the Sofia underground construction.
Trilateral deal
The Government approved a memorandum of understanding between Bulgaria, Greece and Cyprus on the joint launch and use of a $1 billion geostationary orbit for a radio and TV broadcasting satellite. The deadline for starting the exploitation of the satellite is August 2004. The satellite's 37 frequencies will be rented to international broadcasters, with the satellite expected to be in orbit by the start of the September 2004 Athens Olympic Games.
MARCH
Italian purchase
Italy's Miroglio Group bought a 70 per cent stake in Interpred-World Trade Centre in Sofia from DAEWOO Engineering and Construction. Miroglio Group is one of the largest textile companies in Italy and Europe, and is the second largest Italian investor in Bulgaria after UniCredito, which bought Bulbank.
Sour spirits
Prosecution started against the representative of United Distillers & Vintners (UDV) for Bulgaria, Ellie Gerganova, on charges of large-scale smuggling and tax evasion. Gerganova was accused of importing and declaring alcohol at very low prices at the customs checkpoint of Kulata, southwestern Bulgaria, on the border with Greece. Among the famous liquor brands her company brings to Bulgaria are Smirnoff Vodka, Gordon's Gin, and Johnny Walker Scotch Whisky. Later, UDV was accused by controversial TV presenter Margarita Mihneva of being directly involved in dismissing her from private television station BTV.
Think tank
Business association representatives would advise the Government on issues concerning the economic and business development of the country, it was announced in terms of a Cabinet decision approving the establishment of the Council for Economic Growth. The council would advise on economic and social policy of the respective ministries and steps to encourage investment. It would also suggest mechanisms for reducing red tape and bureaucratic barriers and for promoting business development.
New spheres
Swedish bearings giant SKF signed a privatisation contract for a bearings plant, a self-standing part of the Vazov Mechanical Engineering Works (VMZ) in Sopot in Central Bulgaria. SKF Bearings Bulgaria, fully owned by the Swedish company, paid 14.3 million leva in cash for the deal and committed to investing 6.75 million euro in the next three years.
SKF said it would focus on upgrading manufacturing processes and improving productivity.
New recipe
KPMG and Arthur Andersen announced the two companies were in discussions to find ways to combine their operations in Central Europe. However, the Bulgarian subsidiaries of the two world leading accounting companies did not enter into negotiations. In another development later in the year, Arthur Andersen joined operations with Ernst & Young.
APRIL
Balkan debts
Debts of the national air carrier Balkan had risen almost twofold since the last calculation half a year ago, and now amounted to about 292 million leva, trustee in bankruptcy Hristo Mollov announced. The creditors were still expecting a decision by the court on the future of Balkan.
Port purchase
Shipping company Navigation Maritime Bulgare (NMB) became the owner of Varna Shipyard after it won the auction for the assets of the shipyard by bidding 35.5 million leva.
NMB bid against Eurometal Inc. Indonesia's Sigasco failed to deposit the required 3.9 million leva on time; Kiriakou Group of Greece, the US Hogan Marine Group and Kleven Group from Norway, tipped as prospective buyers, did not take part in the auction.
Power guru
Energy expert Peter Barrett was appointed the new Project Director for the AES-3C Maritsa Iztok 1 Project. The project is the largest foreign investment programme in Bulgaria and Southeast Europe in the energy sector, worth over $850 million in inward investment.
Barrett's appointment was announced a few days before the expected publication of the Government's energy strategy.
Changing prospects
European Minerals Corporation (EPM) announced it was acquiring Balkan Mineral Resources Ltd. (BMR). BMR is a privately owned corporation, which has been active in Bulgaria since 1997, and owns a 200 sq km exploration licence located in the Chala area, about 215 km southeast of Sofia, where it was prospecting for gold.
MAY
Easter gathering
Bulgarian Easter was held for a third time in Sofia in the beginning of May. The forum, which brought to power two key ministers in the present Government - Nikolai Vassilev and Milen Velchev, heard strong criticism of many Government steps.
Special probe
An Italian investigation into alleged tax evasion by Italian companies and individuals led to a visit to LUKoil in Bulgaria. A check was conducted of documents related to an Italian company that bid in an environmental project tender invited by LUKoil Neftochim-Bourgas.
The check was not related to a crime committed on Bulgarian territory nor did it involve the oil refinery.
Changing tunes
The Government decided to change Bulgaria's radio frequency plan, a move seen as an opportunity for Bulgaria's first mobile phone operator, Mobikom, to build a digital mobile network. Until then, Mobikom had the right to develop and run an analogue mobile network in the 450 MHz frequency range. The new strategy would allow Mobikom to develop GSM or CDMA technologies, the Ministry of Transport and Communications said.
Sheraton sale
The South Korean firm Daewoo sold its 67 per cent stake in the Sheraton Sofia Hotel Balkan to four companies. The hotel's official statement gave the names of the buyers as Bulgaria-registered International Lodging of Bulgaria, European Hotel Enterprises, Axon Bulgaria and Greek EFG Eurobank Ergasias S.A. The first two companies were controlled by one of the biggest hotel chains in Greece, Daskalantonakis Group. Through Grecotel the group owned 24 hotels in Greece, and another five hotels were under construction. Axon Bulgaria was owned by the Greek company Germanos.
JUNE
Debt paid
Sofia Municipality celebrated the repayment of a Eurobond loan, made up of 50 million euro plus about 5 million euro interest, that was floated in 1999. The amount was paid through Municipal Bank three days before the maturity date of the bonds, which was on June 3. Sofia's eurobond issue was launched on May 12, 1999 on the Luxembourg Stock Exchange and sold out in a few hours. The loan was used for improving Sofia's road infrastructure.
Gas talks
A delegation from Russia's Gazprom and Gazexport held talks with Bulgarian President Georgi Purvanov on the development of the Bulgarian gas market, the national programme for gasification, and opportunities for increasing Russian gas transits through Bulgaria. About $520 million in energy costs could be saved every year if Bulgaria implemented the programme for gasification, Sasho Donchev, chief executive of Bulgarian gas supplier Overgaz, said. Gasification could be completed in 10 years on an investment of $400 million to $420 million, he said.
Opening windows
Microsoft Bulgaria pledged to provide about $1 million to build a national network for the training of 30 000 civil servants in computer skills, managing director Teodor Milev announced. State Administration Minister Dimitar Kalchev and Milev signed an agreement by which the state administration received 30 000 packages of MS Windows XP and MS Office XP software in Bulgarian. The cost of the programme products is $13 650 000 or $455 a package.
JULY
Plama row
A lawyer for Plama Consortium Ltd., which owns the Nova Plama refinery in Pleven, sent a letter to NATO Secretary General Lord George Robertson complaining of the attitude of the Bulgarian authorities, and urging NATO not to accept Bulgaria. Per Christian Nordtome wrote that in Bulgaria the owners of the refinery were confronted with corruption and conflict of interests. The pressure on Plama was the result of a large-scale conspiracy in which participants were the state institutions and enterprises, it was alleged. The complaint followed a statement by Economy Minister Nikolai Vassilev, in which he said that the Government had given the owners of Nova Plama one working week to say when the oil refinery would resume operations. Otherwise, the Government would have no option but to file for bankruptcy.
Power deal
The State Commission for Energy Regulation (SCER) decided to grant a licence to AES to build and operate Maritsa Iztok 1 thermal power plant. AES had already signed a contract in May with British-French company Alstom to become the main contractor of the project. AES was also expected to sign funding agreements with Germany's export credit agency KfW, the European Bank for Reconstruction and Development and a US agency guaranteeing foreign investments.
New brew
Carlsberg Breweries, which manufactures the Tuborg and Carlsberg brands, acquired a 59.4 per cent stake in Shumensko Pivo from its former majority shareholder Fikret Ince.
On the runway
A consortium formed by Kuwaiti Mohammed Àbdulmohsin Al-Kharafi & Sons and United Arab Emirates's Admak General Contracting Company won the tender for the overall reconstruction of Sofia Airport. The consortium is going to build a new 3600m runway, which will allow the landing of wide-bodied aircraft. The entire project is for a new rebuilt airport, consisting of a passenger terminal building and a runway, taxiway and apron system. The project must be completed by 2005. The consortium offered to implement the project at a cost of $62.6 million with a $9.6 million trade discount.
AUGUST
Mtel mulls IPO
MobilTel was considering an initial public offering (IPO) of securities after 2004 at international stock exchanges, the chairman of the Board of Directors of the company, Herbert Kordt, announced. This would happen after the full restructuring of the company and the introduction of the best western corporate practices, Kordt said. He argued the restructuring of MobilTel would take at least a year, while the IPO preparation would take another year.
Buying more brew
Carlsberg Breweries bought 59.4 per cent of another Bulgarian company, Pirinsko Pivo. Carlsberg said it was attracted by the sustained upward trend sales of the Bulgarian brewery. Over the past few years it saw its market share grow from two to eight per cent.
Refinery revival
Representatives of Nova Plama and Economy Minister Nikolai Vassilev reached an agreement on restoring production at the refinery in Pleven. The Ministry of Economy promised to draft and move a bill, according to which the company would repay its outstanding debts to the budget in exchange for which the Government would lessen the refinery's obligations for removing past environmental damages.
SEPTEMBER
Introducing ethics
The Bulgarian Business Leaders Forum launched the Bulgarian version of the Business Ethics Code, part of the worldwide initiative of the Prince of Wales International Business Leaders Forum.
Resort investment
German tour operator ITS Reisen said they would build a small resort on the Black Sea coast next year. The resort would be located between Slanchev Briag and Elenite and would be run jointly by ITS and Balkantourist. ITS ranked second among German tour operators in terms of the number of tourists it has brought to Bulgaria.
DZI plan
Emil Kyulev, the new owner of the privatised former State Insurance Institute (DZI) gave his first news conference. He pledged to make a three million leva direct investment in the company.
The first financial group created with fully Bulgarian capital, DZI-Rosexim, exceeded 200 million leva in total capital and reserves. Kyulev announced the ambition for DZI to reach a share of 25 to 30 per cent of the general insurance market, as it held only about 20 per cent.
EBRD confidence
The European Bank for Reconstruction and Development (EBRD) and Bulgaria's Unionbank signed a contract on the European bank's purchase of 15 per cent of the Bulgarian credit institution. With the move, EBRD made its fifth investment in the Bulgarian banking sector.
OCTOBER
Heating up
Sofia's district heating company (Toplofikatsia) and the National Fuel Gas/Horizon Energy Development of the US signed an agreement to build two 127-megawatt combined heat and power units in Sofia. The agreement was of key importance for a 15-year investment project worth $200 million, carried out by the US joint venture. The two highly effective cogeneration units would be built on the sites of Toplofikatsia Sofia and Sofia East Central Heating Plant and would result in complete modernisation. The project would ensure receipts of about 40 million leva a year and would make a state subsidy of 20 million leva superfluous. Sofia's district heating company would save a further 100 million leva in upgrading and remodelling costs and would pay its debt of 140 million leva to Bulgargaz.
Year one
The second GSM operator GloBul celebrated its first year of operation in the local market.
Over the past year, the company managed to attract 330 000 subscribers and increase its coverage from 25.5 per cent of the country's population to 65 per cent, executive director Nikolas Avgerinos said at a special presentation. The operator had 12 brand name stores and another 425 stores where its products were sold. The company management also announced that over the past year, Globul had invested 600 million leva in developing its operations.
Rating first
The Bulgarian Rating Agency (BRA), the first organisation in the country to post credit ratings, and to estimate appraisals of the risk levels associated with legal entities, was to be established, the Economy Ministry said.
NOVEMBER
Balkan terminal
Half a century of history of Bulgaria's national carrier Balkan Airlines came to an end after the company's creditors rejected the rehabilitation plan proposed by trustees and effectively liquidated the airline. A new national carrier, later named Balkan Air Tour, succeeded the defunct airline.
Varna bonds
Varna's first-ever issue of municipal bonds took off 36 hours after the start of its initial public offering. The securities, offered to a selection of 50 institutional investors, proved a success after investment brokers for the transaction, Unity Invest 99, accepted orders for double the expected nominal value of three million euro from five institutional investors.
The bonds mature in three years and will carry a fixed annual interest rate of 9 per cent. The yield, along with the principal, will be disbursed in three equal annual instalments. Nine per cent is the highest interest offered for euro-denominated bonds on the Bulgarian secondary market.
Heavy metal
Kremikovtsi metallurgic plant's 100 million leva first blast furnace was opened by Prime Minister Simeon Saxe-Coburg. The news of the large-scale investment coincided with a new series of attacks from Minister of Environment and Waters, Dolores Arsenova. She called on Kremikovtsi to keep to its promises and clear overdue debts as well as upgrade its anti-air pollution facilities. The ministry again appealed for Kremikovtsi to pay a total of 814 000 leva in unpaid charges for water and air pollution. The money was owed to the State Receivables Agency (SRA).
Boost for GloBul
The European Bank for Reconstruction and Development (EBRD) said it would invest 90 million leva in GloBul next year. The news emerged after a business meeting with visiting EBRD President Jean Lemierre and President Georgi Purvanov. The GloBul investment, purportedly to be implemented in partnership with the International Financial Corporation (IFC), confirmed the bank's interest in the development of the telecommunications sector in Bulgaria. Sources from GloBul said the company would use the resources to buy equipment and services to strengthen the country's network and turnover capital and encourage competition in the sector.
Banking triumph
The merger of Biochim Bank with the Bulgarian subsidiary of Bank Austria Creditanstalt, HVB Bulgaria, was expected to be finalised by the end of December this year. Representatives of the three banks announced this at a joint news conference. The new bank would continue to use the name Biochim, said Anton Knett, chairman of the supervisory board of Biochim and of HVB Bulgaria.
Taking wing
Newly-established national carrier Balkan Air Tour signed a contract to lease two Boeing 737-300 planes from Lufthansa. The planes would be used by the company to perform its regular international services, it said.
New hotel
A new hotel complex is to be built in the Black Sea resort situated at the mouth of the Kamchia river with German investment. The major partner selling the hotel services will be TUI, the Economy Ministry announced. The cost of the project without the price of the plot of land is estimated at 100 million euro. The construction, according to a preliminary forecast will be finished by the end of 2004, so that the new facilities be launched for the summer season of 2005.
DECEMBER
In the clouds
Balkan Air Tour launched its first flight. The company said it would start selling tickets after it was included in the world booking system, but in the meantime it took over some of the flights of the bankrupt Balkan Airlines.
AES uncertainty
Trouble was foreseen with the construction of a new facility at Maritsa Iztok 1 thermal power plant by the US company AES, after the recently announced debt troubles of the energy giant worldwide. AES and its worldwide subsidiaries owed more than $23 billion, of which $5.5 billion was owed by the parent company and the rest owed by its subsidiaries, Reuters reported. Peter Barrett, executive director of the Maritsa Iztok 1 project said the company was not withdrawing from Bulgaria.
Not for sale
The sale of MobilTel to other owners was not on the agenda, the mobile telecommunications company said. It was responding to reports in the Austrian press, quoted by Reuters, that MobilTel would probably be sold to Telekom Austria AG.
On the line
The year started with GSM operator MobilTel releasing the names of a group of Austrian investors which it said wanted to buy out the company. A new company, MobilTel Holding GmbH, with headquarters in Vienna, Austria, was incorporated for the acquisition of MobilTel. The sale of MobilTel to an Austrian consortium was later concluded.
EBRD strategy
The European Bank for Reconstruction and Development (EBRD) announced its strategy for Bulgaria for the next three years. The bank planned to invest up to 500 million euro in Bulgaria over the period.
HBO moves in
The US movie channel HBO (Home Box Office) said it would launch a channel in Bulgaria at the beginning of April. Home Box Office, a division of Time Warner Entertainment Company, provides premium TV services to subscribers all over the world via cable.
FEBRUARY
Club hit
Vuzrazhdane business club was established, prompting a group of Bulgarians based abroad and in the country to send an open letter to the Government saying they feared special interests could take control of key state institutions. Participants in the Bulgarian Easter, members of New BGeneration and the Bulgarian Wall Street Club of New York voiced their stand in reaction to the proposed establishment of a Council on Economic Growth , to be set up with the Government, that would include Bulgarian big business representatives.
Pulling out
AremisSoft Bulgaria suspended performing its contractual obligations to the National Health Insurance Fund (NHIF) on the development of Phase One and Two of the NHIF Information System. AremisSoft said they were not paid in time. Later in the month, the company closed its Bulgarian operations.
Underground movement
Two new underground stations would link Sofia's southern part with the central and northern districts after work was completed in 2006, it was announced. Construction should begin next year, after Sofia's Mayor Stefan Sofianski signed with Japan Bank for International Co-operation (JBIC), an agreement guaranteeing a $104 million loan for the Sofia underground construction.
Trilateral deal
The Government approved a memorandum of understanding between Bulgaria, Greece and Cyprus on the joint launch and use of a $1 billion geostationary orbit for a radio and TV broadcasting satellite. The deadline for starting the exploitation of the satellite is August 2004. The satellite's 37 frequencies will be rented to international broadcasters, with the satellite expected to be in orbit by the start of the September 2004 Athens Olympic Games.
MARCH
Italian purchase
Italy's Miroglio Group bought a 70 per cent stake in Interpred-World Trade Centre in Sofia from DAEWOO Engineering and Construction. Miroglio Group is one of the largest textile companies in Italy and Europe, and is the second largest Italian investor in Bulgaria after UniCredito, which bought Bulbank.
Sour spirits
Prosecution started against the representative of United Distillers & Vintners (UDV) for Bulgaria, Ellie Gerganova, on charges of large-scale smuggling and tax evasion. Gerganova was accused of importing and declaring alcohol at very low prices at the customs checkpoint of Kulata, southwestern Bulgaria, on the border with Greece. Among the famous liquor brands her company brings to Bulgaria are Smirnoff Vodka, Gordon's Gin, and Johnny Walker Scotch Whisky. Later, UDV was accused by controversial TV presenter Margarita Mihneva of being directly involved in dismissing her from private television station BTV.
Think tank
Business association representatives would advise the Government on issues concerning the economic and business development of the country, it was announced in terms of a Cabinet decision approving the establishment of the Council for Economic Growth. The council would advise on economic and social policy of the respective ministries and steps to encourage investment. It would also suggest mechanisms for reducing red tape and bureaucratic barriers and for promoting business development.
New spheres
Swedish bearings giant SKF signed a privatisation contract for a bearings plant, a self-standing part of the Vazov Mechanical Engineering Works (VMZ) in Sopot in Central Bulgaria. SKF Bearings Bulgaria, fully owned by the Swedish company, paid 14.3 million leva in cash for the deal and committed to investing 6.75 million euro in the next three years.
SKF said it would focus on upgrading manufacturing processes and improving productivity.
New recipe
KPMG and Arthur Andersen announced the two companies were in discussions to find ways to combine their operations in Central Europe. However, the Bulgarian subsidiaries of the two world leading accounting companies did not enter into negotiations. In another development later in the year, Arthur Andersen joined operations with Ernst & Young.
APRIL
Balkan debts
Debts of the national air carrier Balkan had risen almost twofold since the last calculation half a year ago, and now amounted to about 292 million leva, trustee in bankruptcy Hristo Mollov announced. The creditors were still expecting a decision by the court on the future of Balkan.
Port purchase
Shipping company Navigation Maritime Bulgare (NMB) became the owner of Varna Shipyard after it won the auction for the assets of the shipyard by bidding 35.5 million leva.
NMB bid against Eurometal Inc. Indonesia's Sigasco failed to deposit the required 3.9 million leva on time; Kiriakou Group of Greece, the US Hogan Marine Group and Kleven Group from Norway, tipped as prospective buyers, did not take part in the auction.
Power guru
Energy expert Peter Barrett was appointed the new Project Director for the AES-3C Maritsa Iztok 1 Project. The project is the largest foreign investment programme in Bulgaria and Southeast Europe in the energy sector, worth over $850 million in inward investment.
Barrett's appointment was announced a few days before the expected publication of the Government's energy strategy.
Changing prospects
European Minerals Corporation (EPM) announced it was acquiring Balkan Mineral Resources Ltd. (BMR). BMR is a privately owned corporation, which has been active in Bulgaria since 1997, and owns a 200 sq km exploration licence located in the Chala area, about 215 km southeast of Sofia, where it was prospecting for gold.
MAY
Easter gathering
Bulgarian Easter was held for a third time in Sofia in the beginning of May. The forum, which brought to power two key ministers in the present Government - Nikolai Vassilev and Milen Velchev, heard strong criticism of many Government steps.
Special probe
An Italian investigation into alleged tax evasion by Italian companies and individuals led to a visit to LUKoil in Bulgaria. A check was conducted of documents related to an Italian company that bid in an environmental project tender invited by LUKoil Neftochim-Bourgas.
The check was not related to a crime committed on Bulgarian territory nor did it involve the oil refinery.
Changing tunes
The Government decided to change Bulgaria's radio frequency plan, a move seen as an opportunity for Bulgaria's first mobile phone operator, Mobikom, to build a digital mobile network. Until then, Mobikom had the right to develop and run an analogue mobile network in the 450 MHz frequency range. The new strategy would allow Mobikom to develop GSM or CDMA technologies, the Ministry of Transport and Communications said.
Sheraton sale
The South Korean firm Daewoo sold its 67 per cent stake in the Sheraton Sofia Hotel Balkan to four companies. The hotel's official statement gave the names of the buyers as Bulgaria-registered International Lodging of Bulgaria, European Hotel Enterprises, Axon Bulgaria and Greek EFG Eurobank Ergasias S.A. The first two companies were controlled by one of the biggest hotel chains in Greece, Daskalantonakis Group. Through Grecotel the group owned 24 hotels in Greece, and another five hotels were under construction. Axon Bulgaria was owned by the Greek company Germanos.
JUNE
Debt paid
Sofia Municipality celebrated the repayment of a Eurobond loan, made up of 50 million euro plus about 5 million euro interest, that was floated in 1999. The amount was paid through Municipal Bank three days before the maturity date of the bonds, which was on June 3. Sofia's eurobond issue was launched on May 12, 1999 on the Luxembourg Stock Exchange and sold out in a few hours. The loan was used for improving Sofia's road infrastructure.
Gas talks
A delegation from Russia's Gazprom and Gazexport held talks with Bulgarian President Georgi Purvanov on the development of the Bulgarian gas market, the national programme for gasification, and opportunities for increasing Russian gas transits through Bulgaria. About $520 million in energy costs could be saved every year if Bulgaria implemented the programme for gasification, Sasho Donchev, chief executive of Bulgarian gas supplier Overgaz, said. Gasification could be completed in 10 years on an investment of $400 million to $420 million, he said.
Opening windows
Microsoft Bulgaria pledged to provide about $1 million to build a national network for the training of 30 000 civil servants in computer skills, managing director Teodor Milev announced. State Administration Minister Dimitar Kalchev and Milev signed an agreement by which the state administration received 30 000 packages of MS Windows XP and MS Office XP software in Bulgarian. The cost of the programme products is $13 650 000 or $455 a package.
JULY
Plama row
A lawyer for Plama Consortium Ltd., which owns the Nova Plama refinery in Pleven, sent a letter to NATO Secretary General Lord George Robertson complaining of the attitude of the Bulgarian authorities, and urging NATO not to accept Bulgaria. Per Christian Nordtome wrote that in Bulgaria the owners of the refinery were confronted with corruption and conflict of interests. The pressure on Plama was the result of a large-scale conspiracy in which participants were the state institutions and enterprises, it was alleged. The complaint followed a statement by Economy Minister Nikolai Vassilev, in which he said that the Government had given the owners of Nova Plama one working week to say when the oil refinery would resume operations. Otherwise, the Government would have no option but to file for bankruptcy.
Power deal
The State Commission for Energy Regulation (SCER) decided to grant a licence to AES to build and operate Maritsa Iztok 1 thermal power plant. AES had already signed a contract in May with British-French company Alstom to become the main contractor of the project. AES was also expected to sign funding agreements with Germany's export credit agency KfW, the European Bank for Reconstruction and Development and a US agency guaranteeing foreign investments.
New brew
Carlsberg Breweries, which manufactures the Tuborg and Carlsberg brands, acquired a 59.4 per cent stake in Shumensko Pivo from its former majority shareholder Fikret Ince.
On the runway
A consortium formed by Kuwaiti Mohammed Àbdulmohsin Al-Kharafi & Sons and United Arab Emirates's Admak General Contracting Company won the tender for the overall reconstruction of Sofia Airport. The consortium is going to build a new 3600m runway, which will allow the landing of wide-bodied aircraft. The entire project is for a new rebuilt airport, consisting of a passenger terminal building and a runway, taxiway and apron system. The project must be completed by 2005. The consortium offered to implement the project at a cost of $62.6 million with a $9.6 million trade discount.
AUGUST
Mtel mulls IPO
MobilTel was considering an initial public offering (IPO) of securities after 2004 at international stock exchanges, the chairman of the Board of Directors of the company, Herbert Kordt, announced. This would happen after the full restructuring of the company and the introduction of the best western corporate practices, Kordt said. He argued the restructuring of MobilTel would take at least a year, while the IPO preparation would take another year.
Buying more brew
Carlsberg Breweries bought 59.4 per cent of another Bulgarian company, Pirinsko Pivo. Carlsberg said it was attracted by the sustained upward trend sales of the Bulgarian brewery. Over the past few years it saw its market share grow from two to eight per cent.
Refinery revival
Representatives of Nova Plama and Economy Minister Nikolai Vassilev reached an agreement on restoring production at the refinery in Pleven. The Ministry of Economy promised to draft and move a bill, according to which the company would repay its outstanding debts to the budget in exchange for which the Government would lessen the refinery's obligations for removing past environmental damages.
SEPTEMBER
Introducing ethics
The Bulgarian Business Leaders Forum launched the Bulgarian version of the Business Ethics Code, part of the worldwide initiative of the Prince of Wales International Business Leaders Forum.
Resort investment
German tour operator ITS Reisen said they would build a small resort on the Black Sea coast next year. The resort would be located between Slanchev Briag and Elenite and would be run jointly by ITS and Balkantourist. ITS ranked second among German tour operators in terms of the number of tourists it has brought to Bulgaria.
DZI plan
Emil Kyulev, the new owner of the privatised former State Insurance Institute (DZI) gave his first news conference. He pledged to make a three million leva direct investment in the company.
The first financial group created with fully Bulgarian capital, DZI-Rosexim, exceeded 200 million leva in total capital and reserves. Kyulev announced the ambition for DZI to reach a share of 25 to 30 per cent of the general insurance market, as it held only about 20 per cent.
EBRD confidence
The European Bank for Reconstruction and Development (EBRD) and Bulgaria's Unionbank signed a contract on the European bank's purchase of 15 per cent of the Bulgarian credit institution. With the move, EBRD made its fifth investment in the Bulgarian banking sector.
OCTOBER
Heating up
Sofia's district heating company (Toplofikatsia) and the National Fuel Gas/Horizon Energy Development of the US signed an agreement to build two 127-megawatt combined heat and power units in Sofia. The agreement was of key importance for a 15-year investment project worth $200 million, carried out by the US joint venture. The two highly effective cogeneration units would be built on the sites of Toplofikatsia Sofia and Sofia East Central Heating Plant and would result in complete modernisation. The project would ensure receipts of about 40 million leva a year and would make a state subsidy of 20 million leva superfluous. Sofia's district heating company would save a further 100 million leva in upgrading and remodelling costs and would pay its debt of 140 million leva to Bulgargaz.
Year one
The second GSM operator GloBul celebrated its first year of operation in the local market.
Over the past year, the company managed to attract 330 000 subscribers and increase its coverage from 25.5 per cent of the country's population to 65 per cent, executive director Nikolas Avgerinos said at a special presentation. The operator had 12 brand name stores and another 425 stores where its products were sold. The company management also announced that over the past year, Globul had invested 600 million leva in developing its operations.
Rating first
The Bulgarian Rating Agency (BRA), the first organisation in the country to post credit ratings, and to estimate appraisals of the risk levels associated with legal entities, was to be established, the Economy Ministry said.
NOVEMBER
Balkan terminal
Half a century of history of Bulgaria's national carrier Balkan Airlines came to an end after the company's creditors rejected the rehabilitation plan proposed by trustees and effectively liquidated the airline. A new national carrier, later named Balkan Air Tour, succeeded the defunct airline.
Varna bonds
Varna's first-ever issue of municipal bonds took off 36 hours after the start of its initial public offering. The securities, offered to a selection of 50 institutional investors, proved a success after investment brokers for the transaction, Unity Invest 99, accepted orders for double the expected nominal value of three million euro from five institutional investors.
The bonds mature in three years and will carry a fixed annual interest rate of 9 per cent. The yield, along with the principal, will be disbursed in three equal annual instalments. Nine per cent is the highest interest offered for euro-denominated bonds on the Bulgarian secondary market.
Heavy metal
Kremikovtsi metallurgic plant's 100 million leva first blast furnace was opened by Prime Minister Simeon Saxe-Coburg. The news of the large-scale investment coincided with a new series of attacks from Minister of Environment and Waters, Dolores Arsenova. She called on Kremikovtsi to keep to its promises and clear overdue debts as well as upgrade its anti-air pollution facilities. The ministry again appealed for Kremikovtsi to pay a total of 814 000 leva in unpaid charges for water and air pollution. The money was owed to the State Receivables Agency (SRA).
Boost for GloBul
The European Bank for Reconstruction and Development (EBRD) said it would invest 90 million leva in GloBul next year. The news emerged after a business meeting with visiting EBRD President Jean Lemierre and President Georgi Purvanov. The GloBul investment, purportedly to be implemented in partnership with the International Financial Corporation (IFC), confirmed the bank's interest in the development of the telecommunications sector in Bulgaria. Sources from GloBul said the company would use the resources to buy equipment and services to strengthen the country's network and turnover capital and encourage competition in the sector.
Banking triumph
The merger of Biochim Bank with the Bulgarian subsidiary of Bank Austria Creditanstalt, HVB Bulgaria, was expected to be finalised by the end of December this year. Representatives of the three banks announced this at a joint news conference. The new bank would continue to use the name Biochim, said Anton Knett, chairman of the supervisory board of Biochim and of HVB Bulgaria.
Taking wing
Newly-established national carrier Balkan Air Tour signed a contract to lease two Boeing 737-300 planes from Lufthansa. The planes would be used by the company to perform its regular international services, it said.
New hotel
A new hotel complex is to be built in the Black Sea resort situated at the mouth of the Kamchia river with German investment. The major partner selling the hotel services will be TUI, the Economy Ministry announced. The cost of the project without the price of the plot of land is estimated at 100 million euro. The construction, according to a preliminary forecast will be finished by the end of 2004, so that the new facilities be launched for the summer season of 2005.
DECEMBER
In the clouds
Balkan Air Tour launched its first flight. The company said it would start selling tickets after it was included in the world booking system, but in the meantime it took over some of the flights of the bankrupt Balkan Airlines.
AES uncertainty
Trouble was foreseen with the construction of a new facility at Maritsa Iztok 1 thermal power plant by the US company AES, after the recently announced debt troubles of the energy giant worldwide. AES and its worldwide subsidiaries owed more than $23 billion, of which $5.5 billion was owed by the parent company and the rest owed by its subsidiaries, Reuters reported. Peter Barrett, executive director of the Maritsa Iztok 1 project said the company was not withdrawing from Bulgaria.
Not for sale
The sale of MobilTel to other owners was not on the agenda, the mobile telecommunications company said. It was responding to reports in the Austrian press, quoted by Reuters, that MobilTel would probably be sold to Telekom Austria AG.
