Bulgaria's SIGDA gets regulatory nod to acquire Varna TPP from CEZ

The deal does not require clearance from the Commission for Protection of Competition as the turnover of the parties involved is below the respective threshold, the regulator said in a statement.

Under Bulgarian competition law, concentration is subject to mandatory prior notification to the competition authority when the combined turnover of all companies participating in the concentration in Bulgaria in the preceding financial year exceeds 25 million levs ($13.9 million/12.8 million euro).

The concentration must also fulfil one of the following two conditions: either the turnover in Bulgaria of each of at least two of the undertakings participating in the concentration during the preceding financial year should exceed 3 million levs, or the turnover in Bulgaria of the undertaking – subject to acquisition should exceed 3 million levs during the preceding fiscal year.

TPP Varna, with an installed capacity of 1,260 MW, has been shut down since January 2015 due to non-compliance with environmental limits set in its permit.

In October, Bulgaria's energy regulator granted permission for decommissioning of three of Varna TPP's six units. The decommissioning of the three units will cost 8.7 million euro, while the proceeds from their sale for scrap metal will amount to 7.1 million euro.

In September, Czech media reported the supervisory board of the CEZ Group has issued a preliminary approval to sell the group's Varna TPP for 50 million euro to an unnamed buyer, opening the way for the negotiations to proceed.

“The original plan was to sell all assets together, but that has changed because the bid for Varna was so attractive that most probably it will be sold separately," Hospodarske Noviny news daily quoted Vaclav Paces, chairman of CEZ’s supervisory board, as saying at the time.

In August, CEZ Group said it had received binding bids for its assets in Bulgaria from several candidates. It did not name the candidates.

The assets of CEZ Group in Bulgaria comprise CEZ Distribution Bulgaria, the public supplier of electricity and a licensed trader CEZ Electro Bulgaria, licensed electricity trader CEZ Trade Bulgaria and Varna thermal power plant. The operations of those companies are managed and coordinated by CEZ Bulgaria.

(1 euro = 1.95583 levs)