site.btaPrime Minister Borissov Assigns Check of CEZ Bulgaria Sale to Inercom Bulgaria

Sofia, February 24 (BTA) - Bulgarian Prime Minister Boyko Borissov has assigned the State Agency for National Security and the National Revenue Agency (NRA) to conduct a full check into the sale of the CEZ Bulgaria electricity distribution company and into the buyer, Inercom Bulgaria EAD, the Government Information Service said on Saturday.

The PM asked that all relevant circumstances should be investigated with the participation of the Energy and Water Regulatory Commission and the Financial Supervision Commission (FSC). Borissov talked to the heads of the FSC and the NRA, who assured them that they have been monitoring the deal and will conduct a check immediately.

"We recall that the Government is not involved in the transaction between the two private companies but will use its resources to look into all circumstances and guarantee energy security," the press release says.

On Friday, Energy Minister Temenouzhka Petkova tendered her resignation after the sale of CEZ Bulgaria to Inercom Bulgaria was approved by the electricity distributor's owner, CEZ Group, as it transpired that she had been close to Inercom's sole owner Ginka Vurbakova for 20 years.

While information about the price of the deal is not officially available, media reports suggest that this, the largest energy company in this country, which supplies electricity to nearly 3 million customers in Southwestern Bulgaria, servicing an area of 44,000 sq km and employing 3,000-plus people, changed hands for 320 million euro.

In a related development, Vurbakova said in a BTA interview that her company entered the sale procedure unaided. She denied speculation that Inercom is a front for undisclosed business interests. "We will be supported only by a respected banking institution which will extend a loan to us on the basis of specific criteria related to our business and credit record," the Inercom owner said. Asked to name the bank with which her company is negotiating and what part of the financing it will provide, the interviewee said that "during the negotiations [on the sale], we agreed on support for our participation in the transaction from a major international bank with a high credit rating." She declined to elaborate for the time being.

"Our ownership is fully transparent and publicly accessible," Vurbakova asserted. She pointed out that Inercom's 100 million leva assets, a steady earnings growth of some 30 per cent in recent year, an estimated 50 million leva earnings for 2017 and an operating profit of some 10 million leva enabled the group to attract loan financing.

Asked to explain how a mid-size Bulgarian company was chosen to acquire the CEZ operation in this country, the Inercom owner said: "We were selected in a gruelling procedure which attracted a number of international bidders and which was organized and conducted according to the laws of the Czech Republic. Like all other bidders, we went through numerous auditing stages and we had to meet a number of requirements set by the seller: CEZ and its majority owner, which is the Czech State. We proved that we possess experience and a capacity to acquire and manage the companies that CEZ is selling."

"We will be working to make the best offer to customers and to expand the companies' market presence. We are planning to implement innovative technologies on the basis of established international practices. We will channel investments into projects optimizing operational costs," Vurbakova told BTA. "Our efforts will focus on maximizing the security of supplies and on a steady improvement of the quality of services."