Bulgarian Energy Holding (BEH) has successfully placed a 550 million euro bond issue on the Irish Stock Exchange, the company said in a statement on July 27.
After an investor roadshow last week, the bond issue drew strong interest and was heavily oversubscribed, with offers of more than two billion euro. BEH said that it will pay annual interest of 4.875 per cent, the company said.
However, BEH did not say when the bonds were due for repayment and the Irish Stock Exchange only listed BEH’s 500 million euro bond issue from 2013, which is due in 2018.
The funds will be used to repay the 535 million euro bridge loan agreed with three foreign banks in April. That money was used to pay debts owed by electric utility NEK, a subsidiary of BEH, to two coal-powered thermal plants owned by US investors.
The bridge loan was extended by JP Morgan Securities, Bank of China and Italy’s Banca IMI, the investment arm of Intesa Saopaolo. Under the terms of the loan agreement, it was to be refinanced by a bond issue within a year, to be arranged by J.P. Morgan Securities and Italy’s Banca IMI, according to a Reuters report at the time, which quoted a source familiar with the loan agreement.
NEK’s deal with AES Maritsa Iztok 1 and ContourGlobal Maritsa Iztok 3, signed in April 2015, would save save the state utility an estimated one billion leva (about 511 million euro) over the remainder of the contracts, which expire in 2026. The deal envisioned a 17 per cent cut in the price of bought from ContourGlobal Maritsa Iztok 3 and 14 per cent reduction in the price of electricity bought from AES Maritsa Iztok 1.
(AES Maritsa Iztok 1 power-plant in Gulubovo. Photo: Gonzosft/Wikimedia Commons)