Sofia City To Rescue Debt-ridden Heating Utility by Injecting 28.2 Mln Euro in Cap Hike - Media

The capital hike for Toplofikatsia Sofia could be wrapped up in about a month, state-run news agency BTA quoted the the chairman of the Sofia City Council Andrey Ivanov as telling reporters after an extraordinary session of the city parliament.

"With this decision we are trying to solve temporarily the company's problems using our own funds," BTA quoted Ivanov as saying.

"We have been forced to take a decision to raise the capital of Toplofikatsia Sofia. It is not the right one, but it is the only one allowing us to take control of the company and try to save Toplofikatsia Sofia," BTA quoted Sofia Mayor Boyko Borisov as saying before the session.

The city plans to use the cap hike to settle debts of Toplofikatsia Sofia owed to state-run Bulgargaz, which local media reports put at around 190 million levs.

Bulgaria's government owns the remaining 42% of Toplofikatsia Sofia's current registered share capital of 107 million levs.

Toplofikatsia Sofia, which is slated for privatisation, is the third-largest energy company in Bulgaria after the Kozloduy nuclear power plant and the largest coal mining and electricity complex Maritsa East. It has the capacity to produce six million megawatthours (MWh) of heating energy and 850,000 MWh of electricity per year.

The government said earlier it plans to sell the company in a tender by November, but political bickering has delayed the procedure. Finnish utility company Fortum, Czech CEZ, and French companies Dalkia and Electricite de France have so far expressed interest in the privatisation of Toplofikatsia Sofia.

(1 euro = 1.95583 Bulgarian levs)