State-owned Bulgarian Energy Holding (BEH) invited bids in a tender to select a lead manager for a 650 million euro corporate bond, the group said in a notice posted on its website.
The bulk of the money raised through the bond issue would be used to pay state electric utility NEK’s debts to two coal-fired power plants owned by US investors – AES Maritsa East 1 and ContourGlobal Maritsa East 3. Earlier this year, NEK, which is a fully-owned subsidiary of BEH, agreed a reduction of the electricity purchase prices with the two plants, in exchange for agreeing to pay all outstanding debts.
Reports in Bulgarian media in recent weeks claimed BEH planned to borrow about 400 million euro to pay NEK’s debts, given that the utility is already heavily in debt and has little cash flows.
The rest of the money raised by BEH through the bond issue would be used to pay other power generation firms – NEK is required by Bulgarian law to buy all energy generated from renewable sources at a generous feed-in tariff, which has put further strain on its finances – and to improve BEH’s own liquidity, the group said.
Prospective applicants must be ranked among the top 25 investment banks by market share in bond placements globally or in the Europe, Middle East and Africa region in 2014, as well as have previous experience with capital market transactions in the energy sector in the period between 2012 and 2014, BEH said. The deadline to put in letters of interest is September 17.
(Photo: Miroslav Sárička/sxc.hu)