Financial news

The Government approved an annex to the contract between Bulgaria and Kuwaiti Fund for Arab Economic Development under which the country takes a USD 40 million loan for construction of a new runway at Sofia Airport. The deadline of the grace period was postponed to December 31, 2006, while the previous agreement envisaged it to expire at the end of 2005. The prolongation is needed because the main contractors for the construction of the runway, Mohammed Abdulmuhsin Al-Kharaf&sons as well as Admak General Contracting Company asked for extension of the deadline for completion of the construction works and a higher price, too.  

The prices of tobacco and tobacco products will be liberalized after January 1 2005, according to an ordinance, adopted by cabinet in relation to the privatization of the four best performing plants from the structure of Bulgartabac, which is starting Monday. So far, tobacco prices were fixed by a decree, issued by the Council of Ministers and were subject to change only following a request by producers and importers. Starting next year, the price will be freely determined by them. All they will have to do is register it with the Ministry of Finance.

Privatization

Czech’s state-owned CEZ was selected as buyer of the Western Bulgaria pool, which includes the electricity distribution companies (EDCs) in Sofia, Sofia-region, and Pleven. The company is to pay EUR 281.5 mln in cash. The winner in the competition for the EDCs in Southeastern Bulgaria is Austria’s EVN AG, which offered a price of EUR 271 mln. This pool included the EDCs in Plovdiv and Stara Zagora. The electricity distribution companies in Northern Bulgaria, including Varna and Gorna Oryahovitza, will be acquired by Germany’s E.ON against EUR 140.7 mln. A total of 13 offers were submitted in PA on July 9.

Credit Suisse First Boston (Europe) Limited will consult the Bulgarian government on the privatisation of the thermal power plants (TPPs) in Bobov Dol and Varna and Toplofikatsia of Rousse, the local heating utility. The company which the Privatisation Agency (PA) chose competed for the contract with ABN AMBRO BANK N.V. of Amsterdam, Lazard Freres Banqe of Paris, Citigroup Global Markets Limited of London and Dresdner Kleinwort Wasserstein Limited of London. The contract is expected to be singed within 14 days. The experts of the international bank will work in consortium with Linklaters Miculiti&Asociatii spca and Earns & Young Bulgaria.  

Companies

Job dismissals in the Bulgarian Telecommunication Company (BTC) will start in September, the company’s new management team said during a meeting with employees from the telecom's Stara Zagora department, held yesterday. Those, who agree to quit voluntarily, will receive from 6 up to 17 gross monthly salaries as a compensation. These amounts will be relieved of taxes, BTC’s CEO Mr. William Aylward explained. According to him, the company could operate efficiently with a staff of around 9 000 people, while it currently employs some 23 000 people with an average salary of BGN 500.

Financial Supervision Commission (FSC) refused to issue a confirmation of the prospect for secondary public offering of the shares of Delta Development JSC – Sofia. It refused to register the company as public too, which is the necessary requirement for its shares to be traded at the Stock Exchange, the commission announced. This is the third company of Greek ownership, which is refused registration in the public register, Prof. Milcho Stoimenov, member and spokesman of the commission, said, without specifying the reasons for their decision.

The Supreme Administrative Court suspended the decision for the issue of a no-bid GSM licence to the Bulgarian Telecommunications Company (BTC). The two court rulings passed on Thursday are unappealable. With one of the decisions the court united the claims of Globul, Taffeta Ltd. and the prosecution against the award of the licence. The second ruling is for suspension of the preliminary execution until the Commission for Protection of Competition comes up with a stand whether the award constitutes a state aid or not. The fourth complaint, filed by Mobiltel, will be considered by the court after all the documents are collected. 

Mr. Ventseslav Dimitrov was appointed a member of Eurobank's Supervisory Board. Mr. Dimitrov is a Chairman of the Board of Directors of the fuel retailer Petrol Holding, which controls 95.1% stake in Eurobank.  Mr. Michail Michaylov, Petrol JSC as a legal entity represented by Svetolsav Yordanov as well as Eurocapital Bulgaria represented by Tony Rankov are no longer members of Eurobank's Supervisory Board.

Financial Supervision Department with the Financial Supervision Commission imposed mandatory measures on three pension funds – DSK Rodina, Allianz Bulgaria and Saglasie. These are practically some of the biggest companies, operating on the local market in this branch, with a total market share of around 45 per cent.

Europe

SonyEricsson, the mobile handset producer, on Thursday reported increased sales and profits in the second quarter and raised its forecast for the global handset market to 600m units this year. The company, owned jointly by Sony of Japan and Ericsson of Sweden, said the number of handsets it sold in the three months to June 30 had risen 55 per cent on the same period a year earlier to 10.4m, up from 8.8m in the first quarter. In the three months to June 30 SonyEricsson made a pre-tax profit of EUR 113m (USD 139m) compared to a loss of EUR 102m in the same period a year earlier. Sales rose 34 per cent to EUR 1.504bn. Profits and sales were above analysts expectations.

USA

Citigroup Inc. on Thursday said second-quarter profit fell 73 percent to a nearly 6-year low, after setting aside USD 4.95 billion for legal costs related to its role in several corporate scandals. The world's No. 1 financial services company said net income fell to USD 1.14 billion, or 22 cents per share, from USD 4.3 billion, or 83 cents per share, a year earlier. Excluding items, profit would have risen 24 percent to USD 5.34 billion, or USD 1.02 per share, New York-based Citigroup said. On that basis, analysts on average had forecast profit of 97 cents per share, according to Reuters Estimates. 

Asia

Samsung Electronics Co. Ltd. said on Thursday it expected prices of liquid crystal display (LCD) panels to fall by around 10 percent in the second half because of growing supply. "We don't think the price will fall sharply. Probably around 10 percent," a Samsung executive said at a news conference to mark the launching of an LCD joint venture with Sony Corp.  The official did not clarify the time frame for the 10 percent fall.

July 17 – day of St. Marina; Sozopol public holiday

St. Marina’s Christian holiday is officially celebrated on May 17. She is one of the first female martyrs of faith, canonized as saints. According to the legend, Marina was born in III century in Antohia Pisidiiska, in the family of a pagan priest. She was brought up in a time, when idols were worshipped, and Christians were severely pursued. When she was 12, for the first time she heard the name of Jesus Christ and her heart was filled with love for him. Once, when she was already grown up, she met the ruler Olivrius and told him she was a Christian. Her extraordinary beauty struck the ruler, who immediately asked her to become his wife. She refused and was put in chains and brought before the court. In prison, Marina unexpectedly saw the Radiant Cross above her, and when the next day stood before court again, everyone was amazed to see her deep wounds from the previous day completely healed. She suffered many tortures, but was firm and didn’t stop praying to God for one thing only – to be able to go through the water of the Wholly Baptism. The ruler ordered to drown her in a cask of water, with her hands and feet tied. When Marina was thrown into the water, she started praying again, asking God to tear the chains and to make the water her wholly baptism. The miracle happened, and Marina herself was surrounded by extraordinary light. Nevertheless, she was sentenced to death, and her sentence was executed on July 17 – the day, when all Christians celebrate her memory. This day is highly esteemed in Bulgaria’s Southern Black Sea coastal area. It is the official holiday of Sozopol, which protector is St. Marina.