August 22 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Monday it has bought bonds worth 80 million euro ($90.5 million) from state-owned Bulgarian Energy Holding's (BEH's) five-year 550 million euro issue to support reform of the country's energy sector.
"The EBRD’s investment in BEH’s bond is an expression of our strong support for the ongoing reform process to restore the financial sustainability of the electricity sector and promote the liberalisation of the Bulgarian electricity market," Nandita Parshad, EBRD's head of power and energy department said in a statement.
In early 2015, the government launched a comprehensive reform plan to restore the financial viability of the electricity sector and to promote liberalisation of the energy market.
In July, BEH which pools all state-owned energy assets in Bulgaria, said it successfully placed its second Eurobond, worth 550 million euro and bearing a coupon of 4.875%, on the Irish Stock Exchange. The issue, which attracted strong investor interest, was oversubscribed at an amount of 2 billion euro. The proceeds went to cover a bridge facility taken out by BEH at the end of April to settle long overdue debts of its troubled subsidiary NEK to two U.S.-owned thermal power plants.
In June, however, the International Court of Arbitration ruled that NEK should pay 620 million euro to Russia's Atomstroyexport as a compensation for scrapping a nuclear power plant construction project. In return, NEK will receive the nuclear equipment it had ordered, but not paid.
Earlier this month, Fitch affirmed BEH's long-term foreign and local currency issuer default ratings (IDR) and its foreign currency senior unsecured rating at BB- with a negative outlook, but said that it may revise the outlook to stable following the bond issue, which should boost liquidity to cover short-term debt and negative free cash flow (FCF).
($=0.8835 euro)