Bulgaria’s larger production companies may weather the global financial storm but smaller players may be in for painful consequences, a poll of Dnevnik daily showed after managers and bankers warned some businesses might halt investment plans.
“Loan demand is contracting because companies are postponing expansion plans in view of the growing interest rates and the troubled markets,” said Maya Georgieva, executive director of First Investment Bank.
The credit squeeze is forcing companies to put expansion programmes on hold, Georgieva said.
“The high price of financial resources on the global markets will shrink lending in Bulgaria because growing loan prices will take away customers’ appetite,” commented Violina Marinova, CEO of DSK Bank. But good businesses will continue to move ahead, she said.
“Big companies are seeing no borrowing difficulties,” said car battery maker Monbat board chairman Atanas Bobokov. The company has earmarked over BGN 40 million for production capacity upgrades.
“We do not plan to give up on our investment projects; on the contrary, we will try to put them in place sooner,” said Valentin Zahariev, who controls local lead and zinc smelter OCK. The company is implementing a BGN 200 million investment project.
The crisis has stormed the financial markets of certain parts in the world and banks will give up the real estate market for the industrial sector, Zahariev said.
However, drug maker Sopharma executive director Ognyan Donev said growth would slow down meddling with investment programmes and acquisition plans.
In the meantime, Moody’s revised from positive to stable the outlook on DSK Bank, Raiffeisenbank – Bulgaria and Piraeus Bank – Bulgaria after downgrading on Monday the outlook on Bulgaria. The move will push up the borrowing costs for the three lenders.
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