Банкеръ Weekly



The Privatisation Agency (PA) and the Energy Ministry were expected to sign during the week the contract with BNP-Paribas for consulting services in the sale of the seven local electricity distribution companies. In mid-July the French bank won the contest, invited by the Government. The final text of the agreement, however, should be approved by the European Bank for Reconstruction and Development (EBRD), which ensures the money for paying the remuneration to the consultant. This, as well as PA's requirement that PNP-Paribas should be committed to a minimum price of the deal, resulted in a certain delay in signing the contract.For about a month now it has been projected that the sale of electricity distribution companies' majority packages could yield at least USD350MN. In the beginning of June Ivanka Dilovska from the Energy Ministry publicly stated that an average selling price of USD100 per consumer, or a total of about USD450MN, could be expected from their sale.The analysis of such deals in Eastern Europe shows that the proceeds from sales have reached USD150 to USD500 per consumer. Therefore, the proceeds from the sale of the seven Bulgarian electricity distribution companies with a total of 4,500,000 subscribers are pre-estimated at USD675 - 2,250MN.The panel of experts from PNP-Paribas will commit itself to the lowest level of forecast proceeds. Otherwise, it risks to fall short of the expectations, as the information both about the technical and financial situation of the local electricity distribution enterprises is more than ambiguous. Officially, the Energy Ministry drew quite an attractive picture: in the year 2001 the seven electricity distribution companies sold almost 19 billion kWh of electricity, posting total proceeds of BGN1.5BN and about BGN25MN profit prior taxation. Their own investments in the year 2000 amounted to some EUR5MN, increasing to EUR20MN by December 31, 2001. But there is no official information about all other important parameters. It was not announced that in the distribution of electricity the companies registered 22% technological losses on average. Nothing was said about their liabilities, totalling BGN265MN by December 31, 2001. Almost BGN170.5MN of them were unpaid bills to the National Electricity Company (NEC) for electricity supply. The remaining liabilities are due to other suppliere, the state budget, and the National Insurance Institute (NII).The receivables of electricity distribution companies, amounting to some BGN174MN in the beginning of 2002, were not mentioned either. Household consumers' unpaid bills total BGN83.6MN, municipalities' debts are almost BGN23MN, and industrial consumers' liabilities amount to BGN61.5MN.Whom does it serve to publicly report that the electricity distribution companies ended the year 2001 in profit and at the same time keep in secret their huge outstanding liabilities and receivables?, branch experts ask. This could serve least the Energy Minister Milko Kovachev and his team, who as if conceal the financial situation, inherited from Mr. Shilyashki.

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