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INTERVIEW: Bulgaria's Primorsko Club to repay debt to parent Albena, plans expansion

INTERVIEW: Bulgaria's Primorsko Club to repay debt to parent Albena, plans expansion Albena AD/All rights reserved.

SOFIA (Bulgaria), July 4 (SeeNews) – Bulgarian resort operator Primorsko Club [BUL:P0C] will use the proceeds from a recent capital hike to repay part of debt owed to its parent company Albena [BUL:6AB] in order to facilitate loan financing of investment projects, a member of Albena board of directors has told SeeNews.

The debt repayment will improve Primorsko Club’s debt ratio and increase the company’s ability to take out new loans to finance investments, Margita Todorova said in an e-mailed interview.

Primorsko Club increased its capital to 6 million levs ($3.5 million/3.1 million euro), from 2 million levs, by issuing 4 million shares with a nominal value of 1 lev each, the company announced last month.

The company, which operates a holiday village on the southeastern Bulgarian Black Sea coast near the town of Primorsko, intends to add 40 new studio flats to its Forest Beach hotel and build a new reception desk. In addition, Primorsko Club intends to invest in new infrastructure, including restaurants, swimming pools, a waterpark and sport facilities.

The company’s strategy includes developing the holiday village as eco-friendly, free of car traffic, Todorova says.

Primorsko Club posted a non-consolidated net loss of 559,000 levs in the first quarter of 2017, compared to a net loss of 501,000 levs in the like period of 2016.

One of Albena’s other subsidiaries, the Blue Lagoon holiday village near Primorsko, has also drafted a significant investment programme for 2017, Todorova noted. The company intends to build a new restaurant, two infinity pools with waterslides, SPA centre, pool bar, kids’ swimming pool.

The investment plans of Albena are related to the modernisation of the resort located on Bulgaria's northeastern coast, including complete reconstruction of three of its hotels – the four-star Arabella Beach and the three-star Dobrudzha and Elitsa hotels.

In addition, Albena intends to begin the second phase of the expansion of its waterpark, introducing facilities which will be the first of their kind for Bulgaria, Todorova said.

Albena also plans to build an Olympic-size swimming pool, which could be used for sports training as well as competitions. The company also plans to revamp its shopping centre by adding luxurious apartments to the building.

In 2017, Albena expects an 11% increase in the number of tourist overnights spent in its holiday village, Todorova said. The average income per tourist overnight is also expected to increase.

After Albena sold its Sofia-based subsidiary Fohar earlier this year, the company is unlikely to shed stakes in other subsidiaries, Todorova said.

Albena’s profit from selling subsidiaries amounted to 7.9 million levs in the first quarter of 2017, which helped the company swing to a consolidated net profit of 766,000 levs in the review period, from a net loss of 7.3 million levs in the like period of 2016, according to the company Q1 2017financial report.

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