Bulgaria: Possible Eurohold’s expansion of electricity supply business to neighboring countries, SEE Energy News
According to its financial report, Eurohold Bulgaria expects to generate revenues of over one billion euros from its energy business between 2021 and 2025.
Financial and insurance group Eurohold Bulgaria said that it will consider the expansion of its electricity supply business to neighboring countries following the successful acquisition of the Bulgarian assets of Czech energy group CEZ.
In June 2019, Eurohold announced that it has agreed with Czech energy company CEZ to purchase its assets in Bulgaria for a sum of 335 million euros. The acquisition will be financed through both equity and debt financing, and has already mandated two global investment banks to arrange the funding for the transaction. However, in October same year, the Commission for the Protection of Competition (CPC) announced that it did not approve the acquisition of Bulgarian assets of CEZ by Eurohold Bulgaria. The statement from the regulator said that it decided to forbid the proposed acquisition because combining the experience of the economic resources and market positions of the two groups in the electricity and insurance sector creates prerequisites for the notified deal to lead to the establishment or strengthening of dominant position. If concluded, the deal would lead to considerable advantage for the participants in the concentration which would hamper effective competition on the respective markets. In July 2020, the Sofia Administrative Court cancelled a decision by the CPC to forbid the sale of the local assets of CEZ to Eurohold. The court returned the case to the regulator and requested it to conduct a new probe into the proposed deal in line with the court-prescribed guidelines. Later in October, CPC has granted the company the permission to acquire CEZ’ assets.
In related news, the European Bank for Reconstruction and Development (EBRD) said that it will extend up to 60 million euros in a senior loan to Eastern European Electric Company B.V. – a subsidiary of financial and insurance group Eurohold Bulgaria. The proceeds of the loan will be used to finance Eurohold’s acquisition of the assets of CEZ in Bulgaria as well as the 2022-2024 digitalization and distribution network upgrade program of electricity distributor CEZ Distribution Bulgaria.
Eastern European Electric Company B.V. is a special purpose vehicle incorporated in the Netherlands and established for the purpose of Eurohold’s acquisition of the CEZ assets in Bulgaria.