site.btaPublic Gas Supplier Bulgargaz Distrains One Account of Sofia Heating Utility without Imperiling Central Heating Service; Debt Settlement Agreement is Forthcoming

Public gas supplier Bulgargaz EAD has distrained one bank account of the Sofia heating utility company without imperiling the municipal central heating service ahead of the start of the heating season. Both companies confirmed that after initial reports of “distrained accounts”, in plural, and comments by politicians expressing concern over the operation of the company as winter is nearing.

Sofia Mayor Vassil Terziev said that the distraint order is for BGN 25 million. He said that "there is a huge systemic problem because the company has BGN 1.6 billion in debts". "It is very important to work together with the government because both the Sofia public transport and the heating utility call for the active role of the central government, which is very hard in an environment of endless election campaigns when it is hard to take responsibility and make decisions," said Terziev.

The heating utility CEO, Petar Petrov, told BTA that there is no risk for the beginning of the heating season in Sofia and that they are about to conclude a debt settlement agreement with Bulgargaz. Petrov said, "There is no risk for the start of the heating season in Sofia. There is reason to worry. A single account has been distrained. We are busy negotiating with Bulgargaz. We are about to reach an agreement and end this whole drama." He also said that there is no risk for the usual operations of the company and "it is unneccessary to raise tensions on the matter".

Asked what his his explanation for the timing of the distrained, he said that Bulgargaz may be experiencing a need for cash.

Bulgargaz CEO Vesselin Sinabov told reporters that the heating utility owes Bulgargaz over BGN 800 million and this past summer they even stopped repaying their current debt. He said that there is no risk to leave Sofia residents without central heating and confirmed that a debt settlement agreement is expected, leading to lifting the account restraint, possibly by the end of the day.