Financial rescue: Toplofikacia Sofia offers its shares to BEH in exchange for debt forgiveness

Toplofikacia Sofia offers to transfer part of its shares to the Bulgarian Energy Holding in exchange for forgiveness of part of its debts. This is clear from a letter from the company's executive director Alexander Alexandrov to the holding's board of directors. Toplofikacia Sofia has unpaid debts for delivered gas for over BGN 600 million. This debt was transferred as a cession from Bulgargaz to the Bulgarian Energy Holding (BEH). However, the district heating company is not able to pay, and BEH rejects the requests for new deferrals, reminds the Telegraph newspaper.

An alternative

"The acquisition of shares in Toplofikatsiya-Sofia by the holding company by exchanging debt for property is an alternative to solving the debt problem," the director of the Sofia-based company said in a letter, copies of which were sent to Prime Minister Boyko Borissov. Minister Temenuzhka Petkova, the Mayor of Sofia Yordanka Fandakova and other interested institutions.

Prior to this proposal, Alexandrov once again requested a postponement for 3 years of two agreements on assignment obligations from December 2015 and April 2019 and the conclusion of an agreement for rescheduling debts under a cession agreement between Bulgargaz and BEH, concluded in at the end of December 2020. His request comes after a letter from BEH with a categorical refusal to renegotiate the terms of the current agreements and reschedule the debt to the holding formed in December.

Spiral

The main reason for the accumulation of Toplofikacia's liabilities is the huge burden of penalties under the contract with Bulgargaz and the non-market contractual conditions for advance payment of the requested natural gas, which the public supplier flatly refused to renegotiate and which put the company in a debt spiral. the head of heating.

He points out that through the construction of cogeneration plants, Toplofikatsiya plans to increase the production of high-efficiency electricity by almost three times and to provide higher revenues and service its long-term debt. According to him, the implementation of the projects is possible only by reviewing the conditions of long-term liabilities to BEH and negotiating a new grace period on the principal for the period of construction of cogeneration plants.