June 10 (SeeNews) - Financial and insurance group Eurohold Bulgaria [BUL:EUBG] said on Thursday that it will consider the expansion of its electricity supply business toward neighboring countries following the successful integration of the local assets of Czech energy group CEZ.
Eurohold Bulgaria expects to generate revenue of over 1 billion euro ($1.2 billion) from its energy business between 2021 and 2025, figures from the group's presentation of its business development strategy for this period showed.
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Eurohold Bulgaria's earnings before interest, taxes, depreciation and amortisation (EBITDA) from operations in the energy segment are expected to exceed 130 million euro in 2021-2025. The value of the group's energy assets are forecast to reach 700 million euro by the end of 2025.
In June 2019, Eurohold signed an agreement to acquire the assets of CEZ in Bulgaria for 335 million euro. The group will acquire 67% interest in power utility CEZ Distribution Bulgaria [BUL:CZD] and power supplier CEZ Electro Bulgaria [BUL:CZD], as well as 100% of the shares of licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group, and CEZ Bulgaria, through its wholly-owned unit Eastern European Electric Company.
Following the acquisition of the local assets of CEZ, Eurohold aims to improve the current capital expenditures and investment programmes of the companies, it said. The present and future investment programme will be focused on network upgrade and maintenance, innovations and technology, renewable energy sources, and energy efficiency as well as customer service and satisfaction, the group said in the presentation.
As regards the company's other key business segment - insurance, gross premium income is expected to exceed 650 million euro in the 2021-2025 period. The company's total insurance assets are forecast to amount to 730 million euro by the end of 2025, the presentation showed. The strategy for development in the insurance segment includes organic growth, improving return on operations in Romania and Bulgaria, and international expansion.
On Wednesday, the European Bank for Reconstruction and Development (EBRD) said that it will extend up to 60 million euro in a senior loan to Netherlands-based Eastern European Electric Company B.V. - a fully owned subsidiary of Eurohold Bulgaria established for the purpose of the acquisition of the CEZ assets in Bulgaria. The proceeds of the loan will be used to finance Eurohold's acquisition of the electricity assets of CEZ in Bulgaria as well as the 2022-2024 digitalisation and distribution network upgrade programme of CEZ Distribution Bulgaria, the EBRD said.
"Our long-term goal is to develop the sub-holding Eastern European Electric Company as one of the leading companies for utility services in Southeastern Europe (SEE)," Kiril Boshov, management board chairman at Eurohold Bulgaria, told SeeNews in an interview last week.
Last week, Eurohold kicked off a process for a capital increase, aiming to raise up to 100 million euro through a public offering of new shares on the Bulgarian Stock Exchange (BSE). The group will offer for subscription 79 million new ordinary shares at an issue price of 2.50 levs ($1.55/1.56 euro) each, with the success threshold set at 40% of the planned offering. The proceeds will be used to finance the acquisition of the assets of CEZ in Bulgaria and to invest in the development of the group's energy and insurance businesses. In a bourse filing published earlier this month, Eurohold said it will offer the new shares for subscription on June 9.
Eurohold Bulgaria's portfolio currently includes companies active in financial services, leasing, insurance and car sales.
($ = 0.820859 euro)
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