Bulgaria’s National Assembly voted on April 18 to extend the term of the ad hoc parliamentary committee tasked with investigating the circumstances of the proposed sale of electric utility CEZ’s assets in Bulgaria. The motion passed with 112 votes in favour, one opposed and eight abstentions.
The extension, until May 10, was requested by the committee’s chairperson, socialist MP Zhelyo Boichev, who said that it had received a large amount of materials and was still waiting on some additional information from the government.
Since it was set up in mid-March, the committee has held several meetings, including one during the parliamentary recess last week, but its work has uncovered little information that was not previously known.
The only news produced by the committee so far was confirmation that First Investment Bank had indeed offered to lend the prospective buyer of CEZ’s business, Inercom, 80 million euro in December 2017, which the bank initially denied when the deal was announced.
Another lender that media reports claimed was prepared to offer financing for the deal, UniCredit Bulbank, had declined to make any disclosure to the committee, saying that this represented privileged commercial information.
Czech state-owned CEZ announced its intention to exit the Bulgarian market in February. Its chosen buyer was little-known Bulgarian company Inercom, set up last year, which triggered a political storm amid fears that the prospective new owner lacked the necessary know-how to ensure that there would be no disruption in the quality of service. CEZ’s power distribution unit services western Bulgaria, including the capital city of Sofia.
Questions were also raised about the source of Inercom’s financing for the deal – the company’s owner said it would be funded partially using its own equity and using bank loans – with some media reports suggesting that Inercom may be a stand-in for other, unknown interested parties.
In March, Inercom’s owner Ginka Varbakova met with Bulgarian Prime Minister Boiko Borissov and agreed to allow the Bulgarian state to participate in the proposed transaction by acquiring a controlling stake, although the exact details of how that might happen were not made clear at that time. Earlier in April, Finance Minister Vladislav Goranov said that the government was no longer planning to be part of the deal.
With information scarce, it was unclear at what stage Inercom’s talks with CEZ were at, with some media reports claiming that CEZ was prepared to negotiate with another bidder if the deal with Inercom fell through.
(Photo: Clive Leviev-Sawyer)