Banks Shun Sofia Tech Park
For six months the state company Sofia Tech Park, which builds the Technology Centre under the same name in the capital, has been trying to take a bank loan, but in vain. The situation is more than absurd – no credit institution in the country wants to lend money, whereas banking system supposedly has billions of euros that it cannot place because of weak demand.
The future technological centre is funded by the Operational Programme Competitiveness with nearly 100 million levs, but as with all other projects, Brussels will transfer these funds only after completion of the project. That is why on 23 July this year, the Executive Director of the tech park Elitsa Panayotova opened competition for a banking institution to finance the construction of the future offices, laboratories and other facilities with a loan to 77.8 million levs without VAT and to provide another credit to cover the VAT on expenditures amounting to 14.9 million levs. However, no bidders turned up. And since there was nothing else to do, Panaiotova terminated the procedure pursuant to Article 39, of the Public Procurement Act.
Because of expiring deadlines for implementation of the project it was decided that a new procedure will be opened, this time not through an open competition, but through negotiation. So on September 24 calls for negotiations were sent to the first ten banks in terms of value of assets held, and according to the C-Bank these are: UniCredit Bulbank, DSK, First Investment Bank, United Bulgarian Bank Eurobank Bulgaria, Raiffeisenbank (Bulgaria) , Societe Generale Expressbank, Central Cooperative Bank, Piraeus Bank Bulgaria and Allianz Bank Bulgaria. Negotiations did not go easy. In October, financial institutions sent a dozen of supplementary questions for Sofia Tech Park, of which it was understood that there is no finally approved business plan. Moreover, at that time official confirmation lacked from Brussels specifying that the grant does not constitute state aid. It was also announced that banks wanted collateral (pledge of receivables, securities and so on.) This means they were not very confident in the reliability of the technology park, while the proposed pledge on receivables through the bank account for the money from the Operational Programme Competitiveness seemed not enough to local bankers.
The most curious thing is that despite the obvious interest of the bankers in the negotiations finally with a proposal turned up only one candidate - UniCredit Bulbank, told the BANKER Elitsa Panayotova. She said negotiations with the bank went successfully and next week the contract for granting the money would be signed. However, she expressed bewilderment why other financial institutions that were invited and had made written requests for clarification did not take part in the procedure. The main issues of banks were related to the pre-notification for the contract for granting financial assistance for the construction of the Science and Technology Park in Sofia. And the information on this came from DG Competition of the European Commission only at the end of November. So if letter had arrived earlier, maybe there would be more applicants, it might be argued, said Panayotova.
However, according to preliminary conditions, the maximum interest rate that UniCredit Bulbank could suggest, had to be formed by three times SOFIBOR and an addition, but cumulatively it could not be more than 5.5% per annum for the entire term of the loan. The single management fee should not exceed 1%, and there was no option for a default interest at all. Thus the estimated cost of interest and service charges on two loans, they were fixed at 3.5796 million levs. Of course, the bank could have offered better conditions.