Bulgarian PM Boyko Borissov and his cabinet bowed down to conservative and parliamentary opposition, and withdrew the bill for the ratification by Parliament the Council of Europe convention on preventing and combating violence against women, known as the Istanbul Convention. This happened on the eve of International Women's day, 8 March after more than three months of heated public bickering on the topic, which put on the same side the far right United Patriots coalition, the nominally left Bulgarian Socialist Party and the Orthodox Church, against NGOs and pro-women's rights fractions.
The recent debacles related to the Istanbul Convention and the energy sector have exposed rising tensions both among the three nationalistic parties forming the United Patriots (UP) alliance, as weel as between UP and GERB party, their senior partner in the government coalition. Most recently, Volen Siderov, leader of Ataka party which is member of UP, called for the resignation of Delyan Dobrev, a GERB MP and head of the Energy Committee in parliament and called Tsvetan Tsvetanov, head of GERB's parliamentary group "ex-communist". Earlier in February, Valeri Simeonov, leader of nationalist NFSB party said in a TV interview that UP might not go to the upcoming European Parliament elections as a single formation.
After a week-long roadshow across the Western Balkan states and Bulgaria, European Commission President Jean-Claude Juncker failed to give any clear indications on the future of the EU Balkan integration strategy. The topic was highlighted as one of the top priorities of the Bulgarian Presidency of the Council of EU, but it seems more and more like it does not attract significant traction in Europe's capitals. Mr Juncker put forward the 2025 date for possible accession of Serbia and Montenegro, but insisted that each country will have to attain substantial progress with crucial reforms before receiving a concrete timeline to join the EU.
Bulgaria's bid to join the eurozone's training grounds - the ERM II, as well as, the Schengen borderless area will probably be shunned away. The Bavarian Interior Minister Joachim Hermann, member of the conservative CSU, a key partner in the ruling coalition in Berlin, rejected in an interview to Welt am Sonntag Bulgaria's demand to become part
of the Schengen Zone. At the same time, the reactions of the European Central Bank to Bulgaria's ambitions were less than positive. Bulgaria will probably receive a road map to join ERM II, but not a rapid entry.
Energy Minister Temenuzhka Petkova said she resigned on February 23, a day after the announcement of a deal that saw the assets of CEZ Bulgaria (the largest private energy company in the country majority owned by Czech group CEZ) sold to Inercom Bulgaria, a family-owned business from Pazardzhik, to which Petkova allegedly has connections. GERB MP Delyan Dobrev and later PM Boyko Borissov said the deal worth an estimated 320 million euro will be investigated by the domestic security agency DANS over possible fraudulent activities. Read more about the
case in the Energy section (pp 104).
The richest Eastern European, Czech Peter Kellner may buy Norwegian telecommunications giant Telenor's Bulgarian business according to three sources, close to Capital weekly. In mid-February Kellner's PPF investment
fund purchased the Bulgarian assets of another Scandinavian company, Swedish MTG's Nova Broadcasting Group for 185 million euro. The media group is one of the two large private companies, operating the nationally broadcast Nova TV channel, among other TV, Radio and online businesses.
FRIENDSHIP / In January, the parliaments of Macedonia and Bulgaria ratified the agreement on good neighborly relations signed by prime ministers Zoran Zaev and Boyko Borissov in August 2017. It entered into force on February 14. The document stipulates that in the following three months Skopje and Sofia will create a joint committee to clear up misunderstandings about the two nations' common history. Bulgaria also pledges to help Macedonia on its road to EU and NATO membership.
DEBACLE / Bulgaria and Russia had a minor spat in mid-February, when the Kremlin spokesperson Maria Zakharova offered Bulgarian PM Boyko Borissov Russian citizenship and the right to vote in Russian elections. The offer came after Mr Borissov joked before EU leaders that "one can't choose two things in life: his parents and the President of Russia". Despite the tension, Russia did not back down on the events marking the 140th anniversary of the Russo-Turkish war of 1877-1878 in Bulgaria and Russian ambassador to Sofia Anatoly Makarov told local Radio K2 that Vladimir Putin would visit Bulgaria after the March 18 presidential elections in his country.
SCANDAL / United Patriots' co-chair and vice-PM Valeri Simeonov almost caused an European-wide scandal after his National Front for the Salvation of Bulgaria party came out with a declaration, calling for the deportation of European Parliament Greens co-chair Ska Keller to Turkey. The reason was Ms Keller's support
for the "Save Pirin!" protests in Bulgaria. The potential scandal was buried after the Bulgarian government issued a statement saying that Mr Simeonov's party position does not represent Sofia's official line.
TELCOM SERVICES / Telecommunications services provider Allterco has signed a term sheet agreement to sell five of its units to Norway' s LINK Mobility Group for a total of €8.8 million in cash and LINK shares. The deal includes Allterco's units in Bulgaria - Teravoice, Tera Communications and Alterpay, as well as its Romania-based subsidiary Teracomm RO and Macedonia-based Tera Communications. With this deal, Allterco is selling its telecommunications operations in Europe and will focus on the development of IoT devices. The preliminary price of the deal for the sale of the five units of Allterco was determined by multiplying by coefficient of 5.5 their projected annual EBITDA. The final price will be determined on a on a cash-free/ debt free basis. The deal is expected to be completed by April 30.
FOOD DELIVERY / The Netherlandsbased online food delivery marketplace Takeaway.com has signed an agreement to acquire Bulgaria's Hello Hungry, the company operating the BGmenu food delivery service, for a cash consideration of €10.5 million. As part of the transaction, Takeaway.com also acquires Oliviera, Hello Hungry's Romanian business. Majority owner of the company is its founder Vladimir Davchev. Other shareholders include LAUNCHub Ventures, a Bulgariabased venture fund, Hello Hungry's CEO Zornitsa Chugreeva and Telerik founder Vasil Terziev. The acquisition will enable Takeaway.com to strengthen its position in Eastern Europe.
SOFTWARE / Bulgarian software company MM Solutions will be acquired by China's ThunderSoft in a $37 million deal. The price values the company at 5.5 times EBITDA. MM Solutions develops digital photo and video solutions for cameras, smartphones, tablets and other devices and is one of the largest IT companies in Bulgaria with annual turnover of about 25 million levs. Its clients include companies like Samsung, LG, Sony, Huawei, Amazon,Nokia etc. The main owners of the company are Ivaylo Velev (41%) and Nikolay Daskalov (31%). US-based giant Texas
Instruments holds 20%.
PUBLISHING / Klett Lernen und Information, a wholly-owned subsidiary of German publisher Klett, has acquired a 79-percent stake in Bulgarian publishers Anubis and Bulvest and their distributor company Anubis-Bulvest. The previous majority owners - Vladimir Topencharov, Nikolay Tabakov and Yavor Stefanov, will retain the remaining 21% of the three Bulgarian companies, according to Commercial Register data. The value of the deal was not announced. According to the CEO of Klett Germany, Philipp Haussmann, the company will work towards developing digital products for educational purposes.
RETAIL / NEPI Project Four, a Bulgarian entity of South-African fund NEPI Rockcastle, has purchased a 3.6-hectare plot of land in downtown Plovdiv (southern Bulgaria) for 17 million levs, property register data show. The buyer did not comment on its plans but industry analysts say it is going to build a greenfield shopping center, which
will be the fourth such project in the city. The previous owner of the land was Einkaufs-Center Plovdiv, a company owned by Germany's HGA Real Estate and ECE Projektmanagement. This is NEPI's third deal in Bulgaria after last year it acquired the first and third largest malls by revenue in Sofia for a total of €460 million, thus becoming the biggest real estate investor in Bulgaria. Developments to follow.
EXIT / Empower Capital venture fund has sold its minority share in Cremio, the Bulgarian manufacturer of vegetable and dairy cream and milk products under the My Day brand. Two years after providing €6 million to the company together with Uneeda Industries, the two investors have sold their shares to majority owner and long-standing
manager Georgi Ganevski. That is the second successful exit for Empower Capital after the fund sold out of City Clinic in 2016. The €21 million fund is financed by the European Investment Bank - JEREMIE Initiative Bulgaria.
RISING INTEREST / The Ministry of Finance rejected all bids for 25-year Treasury bonds placed in an auction of 100 million levs ( 51.12 million euro) worth of government securities held in January. The market sought 2.98% interest on the bonds, well above the expectations of the ministry which explains its decision to reject the bids. The aim of the issue was to diversify the maturity structure of government debt, which is why investors are expecting a similar offering soon.
SERBIA REJECTS GURI / River Styxx Capital failed to buy Telenor banka after Serbia's central bank refused to approve the Bulgaria-based investment fund as new owner of the lender. Telenor banka is 24th in terms of assets
among 30 banks on the Serbian market. Its current owner, the Norwegian telecommunications group Telenor, signed an agreement for strategic partnership with the fund last year. Under the agreement, Bulgarian entrepreneur and River Styxx CEO Elvin Guri through his company would acquire 85% of the bank, while Telenor would keep 15%. The aim of this partnership was to strengthen the positions of the bank in online customer services by combining the expertise of both parties. Guri is wellknown for his success with Jet Finance in Bulgaria, which was sold to French giant BNP Paribas, while Telenor has know-how in tech. Telenor banka was launched in 2014 as the first mobile lender in Serbia and in three years it attracted 350,000 customers.
PURGE AT BDB / Bulgarian Development Bank sacks key staff. Stateowned Bulgarian Development Bank (BDB) dismissed some of its long-time employees and key experts. The newly installed CEO of the bank, Stoyan Mavrodiev,
replaced the directors of Risk management, Classified credit exposures, Credit administration and Information technologies departments. Executive director Iliya Kirchev was also dismissed. Angel Dzhalazov, who has been a key lieutenant to Stoyan Mavrodiev since they both worked at the Financial Supervision Commission, was appointed to head two important structures in the bank - the National Guarantee Fund and micro finance institution JOBS. The new CEO also appointed many personal advisers.