Financial news

The updated budget’2010 envisages additional funds for the National Health Insurance Fund (BGN 220 M), social programs (142 M) and tobacco farmers (116 M.) The money, however, will be fully paid on one condition – the reforms projects in the respective sectors should be submitted to parliament before September. “I insist that money should be provided only after tangible reforms, particularly in healthcare and pension system. If reforms are not implemented there will be no additional funds,” Finance Minister Simeon Dyankov said flat. The revised budget also envisages over BGN 800 M for stimulation of the national economy.

Even though Bulgaria registered a negative balance of foreign direct investments in the first quarter of 2010, an increasing number of foreign investors are arriving to the country. In January-March 2010, Bulgaria had a negative FDI growth of minus EUR 22 M compared to a positive growth of EUR 926 M in the first quarter of 2009. The data was announced by Bulgaria’s Economy Minister, Traicho Traikov, in Parliament Friday. Traikov did point out that the number of foreign firms investing in Bulgaria was on the rise in the first quarter – 214 companies in January, 340 in February, and 424 in March - and that the increase is the first clearly positive trend since the end of 2008 when the economic crisis kicked in.

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Companies

It is not acceptable for a monopoly to report a minimal profit, said Minister of Economy Traicho Traykov, concerning the dismissal of the head of LB Bulgaricum Hristo Yungarev. State-owned company exports yogurt starter and holds 40% of the markets in Japan and South Korea. To realize a minimum profit on these huge markets is unacceptable and we took measures to improve the company, said Traykov. The project Belene NPP will depend on the market, but without a quality investor it has no future. A good thing is that the contest to choose a financial adviser, which will help to make a fair decision on the future of the NPP, is close to completion. About the new prices of electricity, gas and heating, Traykov said the watchdog must make decisions transparently and according to the methodology. Today Bulgargaz will announce the formula used for calculating the price of gas for the domestic market.

Unlicensed dealers in ferrous and non-ferrous metal scrap will be fined by between BGN 30,000 and BGN 60,000, stipulated the new Waste Management Act which came into force on June 1, the Bulgarian Association of Recycling (BAR) announced. Fines so far ranged from BGN 15,000 to BGN 50,000. The sanction set for a repeated violation is between BGN 60,000 and BGN 200,000. A license will be revoked for systematically breaking the rules for carrying out trade in scrap. The decisions of the Minister of Economy and Energy for discontinuing trade will be preemptively applied, i.e. businesses will be obliged to stop operating, although they could appeal the decision in court.

The state’s debts to the business are very small, Bulgarian Prime Minister Boyko Borissov said after launching a new section of Sofia’s southern ring road. He added the payment scheme through the Bulgarian Development Bank was successful and quite many companies had already received their money. He said a kilometer of the new road stretch costs BGN 15-16 million, and noted the project could have been implemented with 80% European financing. The new section has 10-year warranty.

The first batch of stakes in five companies will make their way into Bulgaria’s newly-founded State Consolidated Company (SCC) in July and August, the Ministry of Economy said. The new group will lump together stakes in E.ON Bulgaria Grids, E.ON Bulgaria Sales, pulp and paper mill Lesilhart, motor vehicle dealership Mototehnika I as well as 100% in industrial installer Montazhi. Once the stakes in the five companies have been sold off, Bulgaria will release state-owned enterprises in the so-called prohibition list under the Privatisation Act. The consolidated company was designed to sell stakes through the Bulgarian Stock Exchange (BSE).

The manufacturer of batteries Monbat will enter the business of lighting technologies. The company has bought 51 percent of the capital of Octa Light Bulgaria - manufacturer of LEDs, which plans to build a factory in the country. Transaction value is BGN 2.35 million and the acquired shares are a total of 25 500. Seller of the package is Oktagon International. The amount of the future investment has been not indicated yet. Some investors wondered why we did not distribute dividends. It is because, it is better to invest in new production with high-potential and future, said Atanas Bobokov.

Devnya Cement will build a new line for production of cement and clinker, said its executive director Alexander Carr. The construction should be completed by 2012. The first sod of the new line was made two years ago, but the crisis has slowed down the project. The investment is for BGN 500 million. For two years in Bulgaria there is a 50% decline in the market for cement. This is also because of the unfair competition of Turkey with imports of cheap but low quality cement.

Europe

Euro zone experts have agreed on the technical aspects of the special purpose vehicle (SPV) for helping euro area countries that run into borrowing difficulties, European Union sources said on Friday. The agreement on the SPV, which could borrow up to 440 billion euros with euro zone guarantees, will require the approval of euro zone finance ministers at a meeting in Luxembourg at the start of next week. "We already have an agreement, all the technical modalities we agreed on now need to be rubber-stamped by the ministers," one senior euro zone source involved in the talks said. "The mechanism has been agreed, it is fully on track and nobody will be able to block it," the source said. The SPV is part of a joint safety net for euro zone countries in trouble set up by the members of the single currency area and the International Monetary Fund (IMF) and worth a total of 750 billion euros.

America

Google announced it has bought advertising technology startup Invite Media, which allows advertisers to bid on ad space. Invite Media developed a way to let advertisers bid in real time for online display ad space and created a "universal buying platform." "We're investing significantly in the display advertising ecosystem and are seeing great momentum," Google vice president of product management Neal Mohan said in a blog post. "Real-time bidding technology is an important part of this ecosystem." Google plans to invest heavily in Invite and eventually mesh its technology into DoubleClick, an online ad-targeting business it acquired three years ago. Financial details of the Invite deal were not disclosed but reports put the price tag at 70 million dollars (US). Invite was founded in Philadelphia and has offices in New York City.

Asia

UK insurer Prudential confirmed its agreement to buy American International Group's Asia life unit had been terminated and it would pay AIG a termination fee of 152.6 million pounds. Deals Hot Stocks. Prudential said in a filing to Hong Kong stock exchange that it would not proceed with the rights issue or other financing related to the deal, while an annual general meeting would go ahead as planned June 7. The UK insurer abandoned its plan to buy AIG's Asian life unit for $35.5 billion, leaving management under fire and the company facing a $659 million bill for failure.

Ribaritsa

Ribaritsa is located 600 m above the sea level, at the foot of Stara Planina mountain, in Teteven Balkan. About 1,250 people live in the village, which is situated 12 km southeast of the town of Teteven and 128 km northeast of the capital Sofia. Ribaritsa extends to nearly 12 km on the valley of Beli Vit river. It was declared a holiday village and is visited by thousands of tourists. The village has preserved the spirit of the Bulgarian national revival and the national traditions. Running water mills, rakia destillers and small craft workshops are functioning there. The river has clean mountain water, nature is unforgettable pictorial, the air is crystal clear, and the beautiful mountainsides of the Balkan mountains are immediately next to it. They are included into the territory of National Park Central Balkan and the Biosphere Reserve Tzaritchina, which is included in the global network of biosphere reserves, is the most remarkable side around. Ribaritsa is a starting point for many mountain hikes and bicycle paths. Reserves Boatin and Kozya Stena (Goat Wall) are not far, as well as the protected area Cheren Rut (Black Hill). Only a few hours walk away are the mountain hostels Echo, Vezhen and Georgi Benkovski, as well as mountain peaks Vezhen and Baba.

On that day:  Temple - chapel St. John the Baptist