Financial news

Bulgaria may again go to international capital markets and sell bonds amounting to BGN 3.9 billion in 2016, according to the draft budget for next year, which is already being discussed in parliament. However, Bulgaria will remain among the best in the EU in smallest obligations. The placement of securities in international markets will be part of the three-year program to issue debt amounting to EUR 8 billion. Bulgaria already has a contract with Citigroup Global Markets Limited, HSBC Bank PLC, Societe Generale and Unicredit Bank AG. Under this program this year Bulgaria has already placed three bonds with a term of 7, 12 and 20 years for a total of EUR 3.1 billion. Part of this money was repaid with bridge loan due to the collapse of the CCB in the amount of EUR 1.3 billion. In 2016, the maximum amount of new debt that can be absorbed by the country is BGN 5.3 billion, according to the draft budget.

Bulgarian Chamber of Private Enforcement Agents (BCPEA) proposes to sell debtors' property at online auctions. Online auctions do not leave room for violations. They are reliable and transparent and lead to a higher selling price, which is in the interest of both collectors and debtors, BCPEA's Chair Georgi Dichev said. He also proposes to have private enforcement agents collect unpaid traffic violations tickets. Negotiations with the Interior Ministry are under way and this question will likely be settled at the beginning of next year, Dichev notes.

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Companies

Americans are new owners of Kurdzhali- based enterprise Pnevmatika. MAT Holding bought shares of the French company Serta whose assets include the factory for production of pneumatic hammers and cylinders. The deal was concluded in August. Production facilities of the company remain the same, as well as number of employees. Annual turnover of MAT Holding reached USD 1.6 billion. The company has 18 subsidiaries worldwide where 13 thousand people are employed. New owners have set a goal of Kurdzhali to become a European leader in the production of hydraulic cylinders. Kardzhali-based company Pnevmatika was founded in 1964 with operation of producing pneumatic hammers and pneumatic cylinders. In 1995 Pnevmatika was privatized. The first contacts with Serta was established in 1996, as in 2000 the French company became a shareholder with a stake of 34% in the company.

The Sofia bourse operator said on Friday market players in Bulgaria will consider the advantages and risks of joining a regional Central Counterparty (CCP) that would provide central clearing services on select markets in Southeast Europe (SEE), an initiative backed by the European Bank for Reconstruction and Development (EBRD). "We will carry out a comprehensive analysis of the advantages of taking part in the project in the context of the costs for clearing and settlement for the end-users and the capital requirements applicable for our members," the CEO of the Bulgarian stock exchange, Ivan Takev, said. EBRD officials are currently holding talks with representatives of the Bulgarian stock exchange, the Central Security Depository (CSD), the regulators, investment intermediaries and banks to discuss the impact of a regional CCP on the development of the local capital market. "We are currently holding preliminary and informative talks about the opportunities, advantages and risks which the EBRD sees in establishing a CCP," Takev also said. The EBRD initiated the regional CCP project early this year aiming to improve the overall efficiency and liquidity of capital markets in SEE.

Bulgaria’s Postbank, a subsidiary of Greece’s Eurobank Ergasias, has wrapped up the acquisition of the operations of the Bulgarian branch network of Alpha Bank, another Greek lender. “Following the signing of the preliminary agreement on July 17 2015, Alpha Bank and Eurobank announce that they have concluded a definitive agreement with regard to the transaction,” the two Greek banks said. Under the deal, Postbank will acquire the entire banking operations of Alpha Bank's Bulgarian Branch, which consisted of EUR 464 M of assets including EUR 307 M of net loans, and EUR 261 M of customer deposits as of end of September. Postbank will also acquire the retail network of Alpha Bank Bulgarian branch consisting of 82 units. After the completion of the deal, Postbank will become the fourth biggest bank in Bulgaria in terms of deposits and loans. “Postbank is expected to benefit from significant synergies from the second year post completion of the acquisition, maintaining its strong capital ratios and substantial liquidity buffers,” the statement read.

The Kamenitza brewery in the Bulgarian city of Plovdiv will be demolished as the production will be relocated at the site of Astika brewery in the city of Haskovo. Both breweries are owned by Molson Coors Brewing Company. A total of 58 employees will be dismissed and will be compensated with between 7 and 14 wages depending on their experience. Another sixteen people will be offered re employment in Haskovo, while 33 will be given the opportunity to sign temporary contracts until the suspension of production works in Plovdiv. Millions have been invested in logistics, renewal of the capacities and optimisation at the brewery in Haskovo. Further EUR 15 M are expected to be invested in 2016, together with the creation of sixty jobs. The historic buildings in Plovdiv will be demolished until new year, with only the chimney to be preserved. Once the site is cleared, it will be used for the building of a microbrewery for craft beer, museum, pub, souvenir shop, park and outdoor stage for cultural events. EUR 2 M will be invested in the project, which is expected to be completed next year and provide employment to 50 people.

Bulgarian entrepreneurs Vassil and Alexandra Mirchevi, owners of VM Finance Group, have won the Most Outstanding Family Business in Central and Eastern Europe Award of Vienna-based Gutmann Bank. They have also received Gutmann Bank awards for Charity in CEE and Best Family Business in Bulgaria. Mirchevi won the big prize in competition with 65 other family-owned companies from Bulgaria, the Czech Republic, Hungary, Poland, Ukraine and Russia. VM Finance Group is managing 12 companies in Bulgaria and abroad operating in various sectors of the economy: fast-moving consumer goods, services, construction and technologies. The group has more than 1,200 employees. Vasil and Alexandra Mirchevi own Manager magazine as well as manager.bg and obekti.bg websites. As part of its private banking activities in CEE, Bank Gutmann – itself a family-owned enterprise – specialises in serving family-owned businesses in Central and Eastern Europe. The Gutmann Award recognises best practice models and highlights the criteria that are crucial to the success of family businesses.

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Europe

Hungary moved closer to regaining its investment grade status at Moody’s Investors Service after Prime Minister Viktor Orban’s government helped reduce the country’s debt load and kept the budget deficit in check. Moody’s lifted the outlook on the eastern European nation’s sovereign rating to positive from stable while keeping the level at the highest junk grade, Ba1, according to a statement published on Friday. That means Moody’s is more likely to upgrade Hungary to investment grade in the future than to keep it at junk status. Moody’s cited a sustained downward trend in government debt, prudent fiscal policy and improving economic outlook for the change in outlook. “An upgrade would be dependent on further confirmation that economic policy making is more stable than in the past, in turn supporting sustained economic growth, fiscal consolidation and a further reduction of external vulnerabilities,” it said. Moody’s was the first rating agency to strip Hungary of its investment grade in 2011 after Orban effectively nationalized private pension funds and levied industry-specific taxes to avoid an international bailout.

America

Dell Inc is preparing to sell around $10 billion in non-core assets, including software and services, to reduce the heavy debt load it will be taking on to buy EMC Corp, according to people familiar with the matter. Dell, which will assume $49.5 billion of debt once the merger with EMC is completed, has communicated the plan to credit rating agencies in recent days, the people said on Monday. Assets Dell could sell include Quest Software, which helps with information technology (IT) management; SonicWall, an e-mail encryption and data security provider; back-up solutions unit AppAssure; as well as IT services provider Perot Systems, the people said. The divestitures will not include Dell's hardware assets such as servers, which are crucial in its quest to dominate the large enterprise market through its merger with EMC, as well as compete more effectively with the likes of Cisco Systems Inc and International Business Machines Corp. Dell agreed last month to buy data storage company EMC for $67 billion, in a move that would transform the No. 3 computer maker into a leader in storing corporate data and shift its business away from the stagnant consumer personal computer market.

Asia

China saw imports drop for the twelfth month in a row in October giving further cause for concern over the Chinese economy. Imports by the world's biggest trader of goods fell 18.8% from a year earlier to $130.8bn, a slight improvement on September's 20.4% decline. Exports dropped 6.9% to $192.4bn, the fourth consecutive monthly fall, as foreign demand waned. That left China with its highest trade surplus on record at $61.6bn. Chinese authorities have been trying to make the economy more consumer-led and less reliant on exports, but the continuing fall in imports suggests domestic demand is not as strong as Beijing would like. The ruling Communist party set a target of 6% trade growth at the start of the year, but total trade for the world's second largest economy has now fallen by 8% in the first ten months.

Pavel Vezhinov

Pavel Vezhinov was born on November 9, 1914 in the city of Sofia. The real name of the writer is Nikola Delchev Gugov. In 1932 he began to work for the “Zhupel” (Fire), “RLF”, “Shtit” (Shield) and “Izkustvo i kritika” (Art and Critique) editions. Four years later he enrolled Sofia University, where he was studying philosophy. In the Spring of 1944 Pavel Vezhinov left for the front as an editor of “Frontovak” (Front-line Soldier) newspaper. His impressions from the war life he described in the short novels “Zlatan” (Bulgarian name) and “Vtora rota” (Second Military Company). The latter became very popular, that’s why it was published several times. After the war ended in 1947 Vezhinov became assistant editor of the “Starshel” (Hornet) newspaper and the “Septemvri” (September) magazine. In 1954 he started to work in the Bulgarian Cinema Industry, where he stayed almost two decades. Pavel Vezhinov is the author of the medleys “Ulitsi bez pavazh” (Streets without pavement), “Dni i vecheri” (Days and Nights), “Sinite Peperudi” (The Blue Butterflies), “Gibelta na Aiaks” (The Death of Ajax), “Momcheto s cigulkata” (The boy with the violin), the children novels “Sledite ostavat” (The Scars Remain), “Proizshestvie na tihata ulica” (An accident at the Silent Street), “Prilepite letiat noshtem” (The Bats Fly at Night), the novelette “Barierata” (The Barrier), “Ezernoto momche” (The Lake Boy), “Beliat gushter” (The White Lizard), and the novels “Zvezdite zad nas” (The Stars Behind Us), “Noshtem s belite kone” (At Night with the White Horses) and many others.